Canada Lags Behind in Retail Trading Platform Options

Photo by Austin Distel on Unsplash

The trade fiasco at the end of January saw the undermining of hedge funds like Melvin Capital.  These multi-billion dollar firms saw their short selling investment opportunities plummet by the oddest group of people you could think of: internet forum users. Members of the Reddit platform sub-group, WallStreetBets decided to pull the rug out from under hedge funds and others holding a large ‘short’ position - trying to make money by projecting the price of the stock will drop – in names such as Gamestop and AMC. 

Using low-commission web and mobile trading software like Robinhood, these anonymous internet users were able to disrupt huge hedge funds. Unfortunately, when Robinhood got a hold of the situation, they restricted trading in a few of these specific stocks as they tried to raise more capital to back the rise in trading being done. 

Frustrated, online traders quickly moved to different apps to overcome this unreasonable restriction by Robinhood. As such, other apps who offer zero-commission trading have made the spotlight, including WeBull, M1 Finance, TradeZero and SoFi.

During this trading frenzy, Gamestops’ stock alone rose by 400%. The frenzy that continues to ensue has shown the world the power of these mobile trading apps and the decentralization of banking. In turn, it's given more people the awareness (especially with the zero-commission fees) and encouragement to get more involved in trading into the market. 

Lots of accessible options for Americans as well as for different user types

The frenzy that ensued at the end of January has also revealed the breadth of brokers and trading platforms out there for Americans. Whether you’re a high-volume day trader or a casual investor who just wants to be able to build their own ETF/Index Fund portfolio from the comfort of your home, the American market offers plenty of choices. From options trading, CFD trading, stocks, currencies, ETFs, commodities, you name it, you can get a hold of a platform that meets your needs. It's no wonder how easily American traders involved or trying to get involved in the Gamestop situation were so easily able to drop Robinhood and jump to the next app that would not restrict their purchasing.

Canadian Market Options 

Canadians were also at their keyboards looking for Robinhood on Google as seen by a huge spike on Google Trends and were disappointed to find out Robinhood was not available in Canada. 

In contrast, Canadian traders looking for options of the same breadth as those offered south of the border only have one option - Wealthsimple Trade – for $0-commission trading.  

Over the past decade, several international brokers and $0-commission trading platforms have had or tried to have prospects within Canada but due to strict brokerage rules, only Canadian-based brokerages have been given the go-ahead to provide services to Canadian residences.  Whether it’s options-trading, stocks investment or ETFs, or currencies, looking for a $0-commission online trader in Canada has scarce pickings. 

However, with this market favorability, Wealthsimple Trade continues to create new features and updates to meet the needs of its clients. In fact, the app recently announced a desktop platform, making $0-commission trading much easier to access for those who are already on their computer all day. 

Wealthsimple Trade looks open to improving their services to meet the greater needs of Canadian residents if they wish to emulate the success of American trading platforms. Currently, they’re the only option in town for those north of the border. 

While once upon a time you required an actual broker or person to conduct stock trades for you, it can now be done from the palm of your hand.