When it comes to Canadian online brokers or trading platforms for active Canadian day traders it’s important to look at the “elite tier pricing” offers that each brokerage offers as opposed to the normal mainstream pricing. Depending on the trading platform, you are usually considered a day trader if you make more than 150 trades per quarter.
We’ll be taking a look at the best day trading platforms in Canada, including the best day trading platform for beginners, how to get started, what to avoid, and some key things to be aware of as you plan for your foray into day trading.
$4.95 - $9.95
Free BUY of ETFs (full prices for ETF sales)
$6.95 - $8.75
Free buying AND selling of 100+ ETFs
Free to buy and sell
$0.01 per share with a $1 minimum
$1 CAD minimum, maximum of .5% of total purchase or sell value
No Available Promotion
To be honest, I think the vast majority of Canadian investors would be much better off not being considered active traders, as the data on actively managing a portfolio through market timing and day trading is pretty rough.
That said, if you’re going to be moving in and out of investment positions quickly, fees and trading platform costs matter significantly more than they would for an index investor or someone looking to buy Canadian dividend stocks to “buy and hold forever”.
Questrade – Our Top Pick Canadian Day Trading Platform
Long one of our top recommended platforms, Questrade doesn’t disappoint when it comes to its day trading features. In general, the trading costs are low, which is key when you’re in the day trading game.
Active traders will enjoy its numerous features, including customized charts, research tools and alerts available on Questrade Edge in addition to optional market data packages to keep you informed with up to the minute Canadian and US market information.
Here’s how Questrade’s active trader fees break down:
|Type of Security||Fixed: For active traders who make high volume trades||Variable: For active traders focused on fewer companies|
|Stocks||$4.95 per trade||1 cent per share (minimum $0.01 to maximum $6.95)|
|Options||$4.95 + $0.75 per contract||$6.95 + $0.75 per contract|
|ETFs||Free to purchase, sell for $4.95 per trade||Free to purchase, sell for $0.01 per share (minimum $0.01 to maximum $6.95)|
|FX and CDFs||Pips as low as 0.8||Pips as low as 0.8|
Learn more in our full Questrade review.
Qtrade – The Best Broker in Canada
Another one of our top picks, actually our best choice for online brokerages in Canada, Qtrade known for its low fees, excellent customer service, and a platform that’s easy to use. In fact, Qtrade is the most beginner friendly site in Canada.
You can create a Qtrade account quickly and easily, and for active traders, it offers Investor Plus, which gives you special pricing. To qualify, you’ll need to maintain at least $500,000 in account assets or make at least 150 qualified trades per quarter. If you’re 18-30 years old, you’ll be able to open an Investor Plus account by depositing only $50 per month.
|Type of Security||Investor Plus: For active traders|
|Stocks||$6.95 per trade|
|Options||$6.95 + $1.25 per contract|
|ETFs||More than 100 free ETFs, $6.95 per trade for others|
Find out more by heading to our Qtrade review.
Wealthsimple Trade – Best No-Fee Trading Site
As far as saving money on trades goes, free is as good as it gets, and that’s one thing you’ll get from Wealthsimple Trade when you are an everyday investor. While it’s not recommended for day traders (a fact that is even mentioned on Wealthsimple Trade’s own website), it is possible. Reasons range from delayed market quotes and fees for active trading.
Keeping those things in mind, if you already have a Wealthsimple account, it could be a decent way to learn the ropes.
|Type of Security||Wealthsimple Trade|
Note that for all US-CAD currency conversions, Wealthsimple Trade will charge a 1.5% currency conversion fee. That among other reasons is why we don’t even rate it as the best place to buy stocks for free in Canada.
Interactive Brokers – Best For Advanced Traders
One of the most popular day trading platforms in Canada, Interactive Brokers, also known as IBKR, offers a low-cost option for active traders. On top of that there’s no minimum balance and you’ll have access to markets in 35 countries.
Interactive Brokers could be a good fit for those ready to take their day trading to the next level, as it offers advanced trading tools for those who know how to take advantage of them.
|Type of Security||Interactive Brokers Fixed Pricing||Interactive Brokers Tiered Pricing|
|Stocks||$0.008 (for 300,000 monthly shares or less)||$0.01(for 300,000 monthly shares or less)|
|Options||N/A||$1.25 per contract, $1.50 minimum per order (for 10,000 monthly contracts or less)|
|ETFs||$0.008 (for 300,000 monthly shares or less)||$0.01(for 300,000 monthly shares or less)|
There’s a lot more to learn about IBKR in our Interactive Brokers Canada review.
What Is Day Trading?
The textbook definition of “day trading” is to buy and sell a stock/bond/ETF on the same day. Many successful day traders will enter and exit into the same “trade” several times throughout a single day if the security being traded is volatile enough.
Essentially (as far as most trading platforms are concerned) day trading is any “active trader” that makes more than 50 trades per month. Some brokers even make allowances for extremely active or “hyperactive” day traders – giving them even lower prices since they are effectively buying the brokers’ services in bulk.
In any case, day trading is usually used to describe someone who feels they can outperform the market average, and who has decided that they can earn money by determining where a market such as the stock market or Bitcoin market will go ahead of time.
It might sound simple to just login to your trading platform and buy-low-sell-high your way to quick riches – but statistically speaking you are much more likely to lose money than to gain money by going this route.
The goal for most day traders is to quickly “buy low and sell high” – thus profiting from quick movements in the stock or bond markets. While this sounds simple, it requires a lot of skill to do efficiently.
While many day traders work with stocks, some will also trade in FOREX, IPOs, cryptocurrencies and NFTs.
How to Start Day Trading
Getting your start in day trading might be intimidating, but it’s like that for most of us when we start any sort of trading activity. Starting slow and steady to learn the ropes will make you feel more comfortable and help you gain the skills you need to be successful.
The first step will be to select the best day trading platform for beginners. If you already have an account with another brokerage, find out if it’s suitable for day trading. If not, you might consider a brokerage like Qtrade, the most beginner friendly site in Canada. Another good idea is to learn how does the stock market in Canada works, and how to buy and sell stocks online.
Next, you need to make sure to spend time on your homework. Being well informed on market news from around the world, as well as news in general, can help you make the best decisions. Make use of your platform’s education tools as well, as if you have access to market reports, it can really help give you an edge.
Another important step to take, as with any investment journey, is to decide on your strategy before you get going. This can help you stay focused and keep emotions in check so you can avoid making reactive decisions that can become costly mistakes.
Some of the most common strategies include:
- Trend following: Buying an asset when the price is increasing and selling when it decreases.
- Scalping: Buying and selling a stock multiple times per day, each time making a small profit.
- Range Trading: Continuously trading a stock, usually over a period of a few weeks, when the price fluctuates consistently, say from $30-$35. The trader will purchase at $30 and sell at $35 until the trend stops.
- News Trading: Trading based on current news events, taking advantage of resulting short-term volatility.
Just like with any investment strategy, patience and consistency is key. Stick to your plan, don’t make bets you can’t afford, and take it slow at first until you learn the ropes.
Day Trading Rules in Canada
Like with any investment, you need to be sure you’re doing things by the book when it comes to taxes. Things can be a bit complicated when it comes to earnings on day trading, so you’ll need to keep some things in mind throughout the process.
Most investors in Canada will be required to pay capital gains tax on half of your earnings. When you step into the day trading ring, this rule no longer applies, as you may be considered as “professional trader” therefore will be taxed as a business. Luckily, because you are recognized as a business, you can claim losses as a deduction.
Another thing to note is that if you are day trading in US stocks with your Canadian brokerage account, you’ll likely be held to the same minimum balance requirement as the US has, which is $25,000. If you’re only trading Canadian stocks, you don’t need to worry as we don’t have the same rule here in the north.
Trading Fees, Options Trading, and Low Margin Rates
Obviously if you’re making upwards of 50+ trades per month, any advantage in per-trade costs gets magnified, so you are looking to pay as little as possible in commissions and fees. If you are looking for fewer trades per month, or for a more passive strategy, then something like Qtrade with $0 trading fees for hundreds of ETFs makes more financial sense.
On the flip side, if you’re a professional day trader (meaning that you rely on buying and selling assets such as stocks, commodities, currencies, and options to put food on your table) then the three main areas that you want to compare are: the trading fees for each transaction, the options trading fees, and the margin rates you will be charged when you borrow money from the broker to buy stocks.
Professional day traders with any notable amount of experience know just how important cutting costs can be. Beating the market is very difficult – but beating the market when you’re paying much much higher fees than many of your competitors is nearly impossible over the long term.
Best Platform in Canada for Day Traders: Customer Service and User Experience
Don’t confuse having a solid knowledge base and experience in trading equities with the idea that you’ll never need help when it comes to navigating a specific trading platform. We’ve seen all too many times from our readers’ experiences that while you might not need help most of the time, if you ever do, you really do.
When it comes to having a reliable platform and excellent customer service, we rate Qtrade at the top of our online brokers list. If you read our Qtrade Review you’ll see we’re not the only ones who have noticed the consistent excellence of their customer support team.
That said, if you’re looking for the absolute lowest fees, it might be worth checking out Wealthsimple Trade, IBKR, or Questrade as well. Just don’t say we didn’t warn you when you try to get the live online chat to work and you have to wait 3+ hours to get an obvious error corrected.
Should I Day Trade In My RRSP or TFSA? What about TFSA Taxes?
The vast majority of Canadians should definitely not use their RRSP or TFSA for day trading purposes. It’s just such a longshot that you will beat the market, that it is very hard to justify using your valuable tax shelters for such high-risk endeavors.
Additionally, the Canadian Revenue Agency (CRA) has come out and said that TFSAs are for retirement savings – not for generating day-to-day tax-free income. As a consequence of that ruling, Canada’s tax man has stated that day traders can be taxed on the gains made within the TFSA if they are moving in and out of positions relatively quickly.
This has led to some large unexpected tax hits for Canadian day traders who thought they were trading under the tax sheltered TFSA umbrella. Once that TFSA contribution room is gone – it’s gone forever – so it’s a potentially very costly mistake.
Overall, I would recommend against day trading within your TFSA or RRSP!
Best Canadian Day Trading Stocks 2022
I should point out that this is not a “Best Canadian Stocks List” – but instead is a ranking of stocks on the Toronto Stock Exchange that have the two qualities that day traders look for: Momentum and Volatility.
If you could accurately predict the movement of these best day trading stocks, you could conceivably have made substantial profits.
|4||ATH||Athabasca Oil Corp|
|7||CPG||Crescent Point Energy Group|
|9||GHG||Global Hemp Group|
|10||TBP||Tetra Bio Pharma|
You will no doubt notice that this list is heavy with companies from the energy sector. This is fairly logical when you consider that Canada’s stock market is home to many of the top oil and gas producers in the world – and that energy is a notoriously volatile market. When you consider that these companies’ revenues have gone up and down by several multiples over the last few years, you can see why the volatility exists.
Day Trading FAQ
Day Trading in Canada – Final Thoughts
Day trading is an investment strategy for a certain type of investor who has considerable time, knowledge and skill that can help reap significant financial rewards. That being said, we do not recommend day trading as the best strategy for most of us to build long term wealth.
It’s risky and the potential to reach a high level of success isn’t very high. Trading stocks with an online brokerage or using a robo-advisor is a solid way to earn solid returns without losing your shirt.
If you value consistent innovation, free etfs, great customer service, and excellent access to investor information, then Qtrade is the way to go. If you want ultra-low trading fees and don’t mind sacrificing in other areas, then I would argue IBKR and Wealthsimple Trade are strong contenders for the best trading platform in Canada title.
No matter which trading platform you ultimately decide is best for you, make sure to leverage the size of your account and the relatively large trading commissions that you’ll be paying to maximize value. If you have an account size over $500,000 and/or you’re making more than 50 trades per month, you should be able to garner a substantial discount from any of Canada’s top trading platforms.
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