It sounds as though I can either do this using margin, without any currency exchange, but then I’d be paying margin rates. Alternatively, I can exchange the U.S. dollars for Canadian dollars, Australian dollars, and G.B.P., and buy the stocks without owing margin fees.

It seems that it would be much better to do the currency exchange? Why would someone instead want to buy on margin–is that just for people who want to buy a foreign stock on a very short-term basis, and who therefore wouldn’t incur margin fees? FrugalTrader said that operating on margin allows one to avoid the currency risk, but I don’t follow that.

[...] stock trading and currency exchange.  While most discount brokers charge 1%-1.5% per exchange, Interactive Brokers charges: 1 basis point (0.01%) + $2.50 [...]

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1) Union Securities Ltd.

http://www.unionsecuritiescommodityfutures.com/

This is a Canadian company, but there are two problems:

a) no trading platform is mentioned on the website
b) I couldn’t set them up as a “payee” on my Royal Bank account page

2) MF Global Canada Co

http://www.mfglobal.ca/index.html

This seems to be a British company with global presence and so far it looks better than IB:

a) there is a choice of Windows desktop trading platforms

b) it can be setup as as “payee” with Royal Bank, so fund transfers should take one day and there is no need to authorize them to look into my bank account.

Does anyone have any experience with MF Global?

Has anyone had any experience trading those instruments with IB. For some strange reason there are no brokers in Canada that offer futures trading. TradeFreedom dropped futures in 2008 and more and more US brokers without Canadian office get scared of our regulators and ask Canadian residents to close accounts, like Transact did last year.

Are there any better choices than IB, as it seems to be a mixed bag:

1) TWS is Java based, archaic technology.

2) Opening a new account takes a few weeks instead of 2-3 days.

3) Electronic Fund Transfers between IB and Canadian bank account take five business days compared to one day with Scotia iTrade or TDW.

4) They apply US rules to residents from other countries, like “pattern day trader rule” ($25,000 minimum to day trade stocks).

I have had very little experience with IB and shorting ETFs but it was very fast and no issues so far. But, that is one person’s very limited experience.

As far as I understand, to short a security at RBC, your order is routed to the loan desk which verifies the current inventory and then fills or rejects your order. The lead time is usually 4-5 minutes. I had been accustomed to a success rate of 1 out of 6 for the securities I had been shorting (which isn’t that bad per my standards).

However, all so suddenly they begin rejecting all my orders and call to tell me “to stop trying to short the stocks” because “they aren’t elligible for shorting since they’re leveraged”. Really? Care to tell me why I hold a negative position in these ETFs as of now? “You just can’t”.

Later, I am told they “aren’t elligible for shorting” because they’re “too expensive to loan”.

Which brings me here – I am in the process of looking for a new broker. I don’t care too much about fees – for the size of my account, I’m willing to pay $30 per trade if it means shorting leveraged ETFs without being rejected 5 times out of 6 and lead times under 4 minutes.

I noticed IB has a nice section of elligible securities for shorting (the ETFs I’m eyeing are all there) and even shows the available inventory! That’s already a huge plus for me. I’m just wondering how successful people have been at shorting leveraged ETFs. Are orders immediate? Does IB need to do a custom check of the available inventory?

I don’t mind the small glitches with EFTs, or the lack of user-friendliness of their interface. I could do without the real time data (I use Google finance) and I already have my own spreadsheet setup to update my own portfolio value and log everything every 5 minutes. The customer service drawback is a bit of a downer but I should know what I’m doing.

I already had an account with Trade Freedom and I wasn’t impressed with the trading platform. I never even figured out how to convert from CAD to USD. My only concern is that I run into the same difficulties with a poorly designed trading platform. Any comments?

There is no automatic currency conversion on IB. If you buy an LSE stock, but have no GBP, then you will end up with a negative GBP cash balance, on which you will be charged interest. It is *your* responsibility to make a forex trade to buy GBP with CAD, so that your GBP cash balance goes above zero.

The base currency on your account is for accounting purposes only. You can keep your cash in any currency you want. You can have a CAD account and keep all of your cash in GBP, or half in GBP and half in AUD, or any combination you like. Since interest is tiered, you will earn less interest if you spread your money than if you keep it all in one currency. However, at current interest rates, this factor is less important than it once was.

If this is true, does anyone have another suggestion of a web broker that Canadians can access who won’t charge an arm and a leg to access foreign stock markets? (and who could even provide direct access – I think IB will let you, but Questrade needs me to call them to put in those trades)

On the – side, I got forced liquidation of my sole position in my account (not using it much rigtht now, paying the indecent $10 a month), although trade was settled and no margin being used. The explanation was BS. Fortunately, the stock then proceeded to lose another 50%, but I was in cash.

Can someone explain the logic here. You buy 1 stock for 5K, no margin used, cash used. Then it is worth 2500 (-50%) and they liquidate stating that you don’t have enough equity to support the excess liquidity or something like that.

I am mistaken here?

At this moment looking at trading platform and TWS looks like it has everything you can imagine, but because of that very, very complicated. Is that right or just (bad) first impression?

TF and TDW share same kind of platform, different names though.

Zack

1. Live market data feed (TSX-V) is unreliable. At times, I would go on for a good month before it would work again. And they would not refund my money.
2. There used to be unlimited levels for level 2 data. Then one day, they limited it to 5 on both the ask and bid sides. They claim that it was a gift from them to offer unlimited levels yet it is mentioned nowhere on there website.
3.Generally bad helpdesk. There were a few good helpdesk technicians that were very responsive. However, anything complicated which gets escalated take forever to resolve. I guess it’s just shitty 2nd tier support.
3. They violate their terms of service whenever they please. Eg. changing the fee schedule without giving the allotted notice time as mentioned in the contracts. I made so much fuss about it that they escalated my case to their top legal guy. I explained to him that the two weeks isn’t enough time for me to move my money away from IB. Basically, he told me off and said that since I wasn’t a major customer, they would not care.

Despite these cons, there were some positives:
1. love the worksheet and how I could see how my portfolio is doing at a glance.
2. customization ability of their trader workstation.

But these positives were greatly overshadowed by the many problems I have had with this broker. AVOID.

For me, I have bought my own stocks for almost 30 years. The IB interface and lack of user friendliness was hard to get used to at first but now I’m quite comfortable. It is not what I would have chosen except that their margin rates are the best that I could find.