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Think or Swim Discount Brokerage Review
When I receive emails promoting a product, I typically hit the delete button assuming that it's SPAM. This time though, the product was for a new discount brokerage offered in Canada, so I had to take a peak. Note that this is NOT a sponsored post and MDJ is not affiliated with Think or Swim in any way.
When I first heard of Think or Swim, I thought it was a book title. Do the words "Think or Swim" conjure up images of a discount brokerage to you?
This article will provide a preliminary view of the discount brokerage Think or Swim Canada. As I don't have an account with them, I can only go by what it stated on their website. I would be grateful if there are any users of Think or Swim to add their comments.
Trading Platforms
- thinkDesktop - a software based trading platform, I assume that it's the same idea as Interactive Brokers.
- webBasedTrading - their web based trading platform.
- thinkAnywhere - smartphone/pocketpc based trading platform.
- thinkMobile - regular cell phone trading for phones with mini browser capabilities.
Commissions/Fees for Trading Stocks (USD)
- $0.015/share ($5 min) or
- $9.95 / trade (5000 shares max).
- No Additional fees for calling trading desk to make trade.
Commissions/Fees for Trading Options (USD)
- $1.50 / contract with min of $7.50 / trade.
Datafeeds
- All live data is free.
Currency
- Only USD is accepted with their accounts (What are they thinking? How can they open a Canadian version of their brokerage without letting Canadians hold their local currency?)
Advantages
- Ability to call trading desk to make trades at no extra charge.
- The additional options in trading platforms. Although I wouldn't trade over my mobile browser, it is a nice option to have.
- Low commissions.
Downside
- Cannot hold Canadian currency within a Think or Swim Account.
- No RRSP's.
- No Canadian office. All paperwork/cheques need to be shipped to their head office in Chicago.
- No mutual funds.
Final Thoughts
As of right now, I don't think that Think or Swim is a particularly good choice as a Canadian discount brokerage. If you compare them with other discount brokerages that I've reviewed, you'll see that they are lacking in a couple key areas. The biggest being that the investor cannot hold Canadian cash within the account.
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27 Comments, Comment or Ping
1. Four Pillars
No CDN$ is indeed strange. Maybe they don’t know that we have our own currency?? :)
Mike
Feb 12th, 2008 @ 8:42 am
2. Gates VP
OK, that’s insane.
I blast into US companies all of the time for not having any sense about Canada. One of my favorite magazines (Maximum PC), once stated that they couldn’t hand out contest prizes to Canadians b/c their legal advice had suggested that random draws weren’t legal in Canada!
Heck I’m working at a firm that’s still “globalizing”. One of the “big chiefs”, of a $200M+ company, was shocked to learn that Canada was part of the G-8 (yeah turns out we’re pretty big :)
Of course, in this case, Think or Swim just failed horribly. They should drop $100 in your account and ask you to try again in 2 months when they’ve got their head on straight.
Feb 12th, 2008 @ 11:09 am
3. Real Investor
TOS has one of the best customer service and platform amongst its brokers.
From a commission stand point IB is the cheapest, however there is a cancellation fee when you decide to make changes to the order.
If you are a professional trader then I would highly recommend it.
Feb 12th, 2008 @ 11:44 am
4. Real Investor
If anyone wants a detail explanation I could write a detail list on the pros and cons of TOS
Feb 12th, 2008 @ 11:46 am
5. FourPillars
Gates, you should ask your ‘big chief’ if he can name the largest trading partner of the US…
Feb 12th, 2008 @ 12:35 pm
6. Gates VP
Gates, you should ask your ‘big chief’ if he can name the largest trading partner of the US…
Turns out it’s China :)
But trust me, we’re working on the “big chief”.
Feb 12th, 2008 @ 1:10 pm
7. FourPillars
According to Wikipedia it’s Can.
http://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_the_United_States
Feb 12th, 2008 @ 1:24 pm
8. Zac
Re: the random draw legality in Canada … Maximum PC is not completely wrong. There’s a reason why every one of those things in Canada is called a “contest”, and why you have to answer a “skill-testing” question in order to claim your “prize”. On the plus side, we also always get the “No purchase necessary” clause to go with it.
http://en.wikipedia.org/wiki/Skill_testing_question
Otherwise it’s a lottery, and the government runs/regulates those.
Feb 12th, 2008 @ 2:09 pm
9. CheapCanuck
Not being able to hold canadian currency is indeed bizarre. As Gates stated above US companies don’t have much sense about their neighbors to the north. I work for a large US based company that has an office here in BC, and the policies they try and force down our throat here to make us conform to their way of doing things leave me shaking my head on a daily basis. I swear if it came down to the choice of being flexible to keep a customer, or to rigidly stick by company policy, they would let the customer walk away every time…
Feb 12th, 2008 @ 2:39 pm
10. Gates VP
Zac: I’m totally aware of the rules regarding Canadian contests, what’s sad is that they don’t.
I actually contacted them directly with the information: “What, you don’t think we have any random draws in this country? It’s called a contest, you add a skill-testing question…”
But no dice. They don’t get it.
Feb 12th, 2008 @ 3:45 pm
11. Dividendgrowth
So far they are opening their branch in canada but don’t allow you to trade in cdn$.. So can you trade Canadian stocks through this platform or only US stocks? If not, maybe you can buy canadian companies listed on US exchanges..;-) That’s confusing..:-)
Feb 12th, 2008 @ 4:33 pm
12. Real Investor
Dividendgrowth,
I am currently a customer with them. The broker works good for you only if you are willing to trade in US derivatives. If you are looking for Canadian stocks then you have to stick with other brokers.
They are currently working with Canadian regulators to get canadian stocks
Feb 12th, 2008 @ 4:56 pm
13. jpohl
Yesterday I read a post in a forum while doing some research, in which someone actually referred to Canadian dollars as monopoly money. (It was written a “few” years ago.) Generally I think smart companies are growing more respectful as they learn to do business online.
Feb 12th, 2008 @ 6:51 pm
14. George
No $CDN? And they’re opening a “Canadian” branch? That’s nuts.
I think I’ll open a doughnut shop in Chicago and only accept Canadian dollars. Something tells me it’ll be a huge success…
If you’re operating in a country, you gotta accept the local currency. That’s just the way things work.
Feb 12th, 2008 @ 11:19 pm
15. Nicolas
Interesting post.
No CAN$… No comments. If they are working on that, it seems to me they should have waited to open shop.
As for the biggest US partner, it is now China. Used to be Canada but that changed about 2 years ago or so. (Wife is an economist)
It seems Wiki is not always up to date.
Nicolas
Feb 12th, 2008 @ 11:54 pm
16. George
China’s the biggest US trading partner primarily because of Wal-Mart, which purchases an absolutely massive amount of “stuff” from Chinese manufacturers.
Feb 13th, 2008 @ 12:04 am
17. Chris S
One of the founders if Scott Sheridan, who does frequent tv spots on a Chicago business news show in the early am. He is a big time contrarian and so has been a bear for the last couple of years. However, although he always seems pessimistic, he typically explains himself well and gives good ideas about how to make money on trades no matter which direction the market is going, as well as how to limit risk and losses. Definately a trader’s trader, but fun to listen to none the less.
Feb 13th, 2008 @ 12:17 am
18. Dividendgrowth
Real Investor- I don’t doubt that they are a good broker. I just find it very entertaining that they are opening a branch in Canada, without accepting C$. I agree with George that this is the same as opening a doughnut shop in Chicago and accepting anything but US dollars. With US dollar in free fall, maybe selling stuff un Us for other currency is not a bad idea..
http://www.reuters.com/article/domesticNews/idUSN0655798320080206
Feb 13th, 2008 @ 10:46 am
19. Trizi
TOS was at a financial convention in Toronto recently and I asked them about it. I’ve been using their software (papermoney only) and it’s robust.
They spent the last year or more working with the Canadian brokerage industry regulators to get licensed here. I assume they took so long to get it going because of red tape and (obviously) regulatory differences.
Anyway, the reason why they opened up without the Canadian content is that they were getting a lot of calls from Canadians asking why it was taking so long to get up here. They finally decided to just do it and open up even if it’s only US stocks and options (for now). However they are committed to Canadian currency and to RRSP accounts. Someone at the booth told me they have 100 programmers working on the system but it’s tricky for a lot of reasons I won’t get into here.
Anyway, maybe the end of spring we’ll see some Canadian content. It was a long conference but I think they said they’ll have mutual funds too. I don’t know the priority. I will tell you they have a new software release every couple of months.
Folks, TOS is superb - true pioneers - so take a closer look. You can download papermoney to check out what they have. The Help tab has a lot of flash tutorials so you can get the gist of the scope of the offering.
Feb 14th, 2008 @ 11:46 pm
20. Gates VP
Hey Trizi, thanks for the information, but as a software developer, this quote raises a huge number of red flags for me:
Someone at the booth told me they have 100 programmers working on the system but it’s tricky for a lot of reasons I won’t get into here.
Surely they don’t have 100 people working on just the Canadian system. If that’s the case, it’ll never get done :)
Their 2006 annual report lists 650 employees, so I would believe that they have 100 developers in total across all of their products. But software is not their only income source, they also do training (from the looks of it).
Of course, having lots of developers tends to mean that work takes a very long time (even if this sounds counter-intuitive). Being anywhere in the financials industry and having to satisfy tighter government regulations means that changes tend to take a very long time.
Oh yeah, looks like the found a Canadian Security Services provider, but notice how the document is less than a month old.
They finally decided to just do it and open up even if it’s only US stocks and options (for now)
I’ll level with you, lines like this just give me the willies. If the work were being done by 5 guys in small office, I’d believe that it could be done next month. Give it a to team of 100 hundred people and it means that we’ll be lucky to see something this summer. Heck, check the investor section of their website, these guys haven’t even reported income for the 2007 yet.
Hopefully they send you an updated e-mail when they get there, I’m now holding USD on top of my Canadian stuff, so it’s good to hear about people who support both.
Feb 15th, 2008 @ 2:28 pm
21. Bruno D
Folks, don’t be so hard on Think Or Swim. In the US, they are one of the fastest growing discount broker amongst pro traders and pioneers in many ways. If I’m right they are really appreciated for their options trading.
IB also ranks high but usually people complain a lot about their software platform. I’ve watched some demos a while ago at ThinkOrSwim and was absolutely impressed by their software platform, though they weren’t accepting canadian customers back then (regulatory hurdles mostly as they told me). I was one of the folks who sent them a few emails to see if they were going to allow that at some point.
Read the reviews if you don’t believe on Elite Trader, a big forum for pro traders in US:
http://www.elitetrader.com/br/?action=view&R_FirmID=146
for IB:
http://www.elitetrader.com/br/?action=view&R_FirmID=43
I think this is a good first step and am sure that if TOS said they would do it, it will happen. Once they get CAD money and stocks available I may very well switch there, or at least open an account and consider switching.
Apr 7th, 2008 @ 11:49 am
22. sergio
Think or Swim is perhaps the only discount broker in Canada that let you use a conditional order method. Try anyone else in Canada (goodluck) just kiss your money goodbye
Apr 8th, 2008 @ 11:02 pm
24. Mark
GUYS OF COURSE THEY ALLOW YOU TO HOLD CANADIAN CURRENCY, YOU’RE REVIEWING THE US VERSION. The one you want is TOS Canada:
http://www.thinkorswimcanada.com/tos/client/index.jsp
May 8th, 2008 @ 11:24 pm
25. FrugalTrader
Mark, you would think that a Canadian brokerage would allow Canadian currency. But check out their FAQ.
You can deposit your CAD, but it will immediately be converted to USD.
May 8th, 2008 @ 11:47 pm
26. Ashleah WIlson
To be honest, I personally think it’s great that they don’t accept Canadian dollar deposits. At least, that is if your primary (or in my case, ONLY) investing is in US equities, it makes a lot of sense. I recall in the early days of “online” brokerages when I would have given anything to access the rates and commission structures of the US internet brokerages. When considering the outrageous commissions involved in using a Canadian mainstream bank, I look at TOS as a wonderful and much needed alternative. And remember if you invest through Questrade (as an example) there are currency conversion fees associated if you invest in US equities using Canadian currency. I’m not fully up to speed on the cost consequences, but it is certainly something to consider. With TOS, assuming it is as described, the process is just, well, tidier. As an aspiring equity investor, transacting somewhat infrequently, I appreciate tidy.
May 26th, 2008 @ 12:39 am
27. Lucie Bellemare
I am not yet a member of ThinkOrSwim for the only reason that they are not yet available in Quebec. According to their site:
“Only Ontario, British Columbia, Alberta and Saskatchewan residents can open accounts at this time.”
However, I emailed them to see if and when they would be available in Quebec, and they replied a few minutes later (although it was about 9pm) saying that they hope to receive approval in Quebec and Nova Scotia in the near future.
I also asked if I could use their papermoney software in the meantime to get familiar with it, and they sent me a username and password the next day. So I downloaded the software and have just started to use it several days ago. I agree with the posts above that say this is a very robust software, with lots of features, including live graphs, and lots of video tutorials in three formats on the Help page.
Like Ashleah, I don’t mind if all the trades are done in US currency. Canadian users only pay the exchange rate, then it’s all US money from there.
I can’t wait for them to open their site to Quebec residents.
Jun 18th, 2008 @ 12:02 am
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