After seeing a lot of Questrade commercials while watching hockey, I finally decided to give it a go. They said they saved people money after all, and the commercial seemed oddly serious. This must be a big deal.
At the end of the day I had mixed results. There are aspects to like about this brokerage service and aspects which could be improved. Really, the reason I decided to sign up was because of this campaign:
The Costs
My eyes were immediately drawn to the “1¢ / share ” in the ad above. So much so, in fact, that I didn’t even realize you need to buy 495 shares minimum in order to get this price. Absurd really. If you’re more perceptive than me then you know this already. For the rest of you, just know that you will always be paying a minimum of $4.95 on both legs of the trade (buy / sell).
Of course, this price is still below the going rate for a lot of the big banks online brokers in Canada (~$10). For that I have to give them kudos . They are saving people money at the end of the day. Yet, I am positive that I am not the first person who signed up for this and was caught off guard when those 1¢ commissions didn’t materialize. Bummer.
Of course, this $4.95 commission price is still below the going rate for a lot of the big bank online brokers in Canada (~$10). For that I have to give Questrade kudos. In this way, they truly are saving people money. Yet, I am positive that I am not the first person who signed up for this and was caught off guard when those 1¢ commissions never materialized.
On the other hand, it was a cheap lesson. The cost for setting up a Questrade account is $0. The minimum balance is $1000.
Options
The ability to trade options contracts is not something that everyone has. Many banks make people jump through a couple of hoops in order to buy options, at least in Canada. And unlike in the United States, services like Robinhood where you can trade options for free are not available here. So this was something new.
Yet they do make you pay for it. Each option contract that you trade on Questrade is $9.95 as a base, plus an additional $1 for every contract. That means if you want to buy one contract it would be $10.95. Ten contracts: $19.95. Et cetera.
Evidently, this pricing structure works better for someone who is purchasing a small number of contracts. Therefore, it is meant for those people buying mostly in the money options as opposed to out of the money. It simply doesn’t make sense to buy 100 options contracts on this service for $10 a contract, as this would cost you a behemoth-sized $109.95 commission. It would make much more sense if you are buying 1 option contract valued at $1000.
One of the best features of the options platform is the ability to view the price of individual options as a chart. This can be quite useful for assessing how the market prices options over time.
While you can enter into simple put and call options right off the bat with no minimum account balance, varying requirements are needed to enter into more sophisticated trades. You can find these requirements here.
Stocks
For buying Canadian and American stocks, the process is pretty much exactly as you would expect. Unlike WealthSimple Trade (WealthSimple trade review here), all stocks are available regardless of trade volume or share price. That’s why I would recommend Questrade for buying stocks which aren’t available on WealthSimple. For the contrarian investor, this is important because many high quality stocks do not trade for much, and certainly don’t get too much trading volume.
Furthermore, you can purchase USD (2% exchange fee) in order to trade in American stocks on Questrade. And, unlike WealthSimple, you can hold US dollars in a Questrade account.
The order placing gives you a fair amount of options including trailing stop limits, order duration, and even order routing. Quite frankly, I can’t say I know exactly what all of the options even do. But they have them, which is cool.
ETFs
ETFs are all available and are free to purchase, yet cost the standard $4.95 commission to sell.
Research Tools
IQ Edge
The browser-based version of Questrade is fairly limited in research tools. However, they do have a desktop application called “Questrade IQ Edge”.
I have to say that I don’t use this application all that much. Yet, the fact that it includes a functional stock screener is quite impressive. This is very important in my opinion (see here for an overview of screeners), as screeners are the jumping off point for great investment decisions.
From quickly looking over the service, I can see that it is highly customizable, and perhaps more oriented towards the high frequency trader. For instance, you can quickly gain access to the “top gainers” and “top losers” of the day. Furthermore, services like “StockTwits” conversations are featured, a tool like twitter which quickly allows you to gauge market sentiment.
It also leverages Morningstar Research, a quality firm, for fundamentals and analysis. For example, for many stocks you are able to find a Morningstar “Fair Price” and a snippet of relevant commentary. This is a definite plus, and I am glad they included this feature.
Unfortunately, for those who want to go the completely free route this platform is limited. There are various upgrades to exchange “market streaming levels” you must make in order to use some features, and these cost money. You can review the pricing of the packages here on Questrade’s website.
Website (Browser)
Despite its limitations, the browser-based version of the software has some important features. Notably, it displays news and events alongside stocks as you are looking at them. If you venture into the “research” tab, you gain access to data such as company events, economic events, earnings, dividends, and analyst ratings.
Honestly, I never found myself inclined to use this feature because the UI is quite bland and unappealing in my opinion. Instead of feeling like an in the know wall street pro like with IQ Edge, you just feel kind of bland. However, obviously that is just a personal preference. It is great that this data is available to all users and for that I must give Questrade even more kudos!
Real-time data is available, yet you must press a button every couple of seconds if you want up-to-the-second information. Upon clicking the button, data changes from “>15 min” to “<1 sec”.
In Short
In the interest of keeping it short I will wrap it up here. I would say Questrade is useful for most people only in select circumstances. For example, if you can’t find a stock or ETF on WealthSimple Trade, Questrade will have it. Moreover, if you want to trade options without jumping through any hoops, Questrade might be your best bet. Unfortunately, the upselling and not-entirely-transparent fees lower Questrade in my eyes.
Questrade is not my first option for stock research, but the IQ edge is actually a surprisingly good application once you get to know it. I still think its interface is more suited to a day-trader type, but Morningstar supplements it with some useful value-relevant information.
Overall, I haven’t always been impressed with Questrade, but it hasn’t made me rage that much either.
Therefore, I score Questrade 7.25/10 .
If you want to know more about Questrade, let me know in the comments below!
Otherwise, as always,
Happy Investing.
You made several good points there. I did a search on the theme and found most people will go along with with your blog.