The internet has dramatically impacted our day-to-day lives and revolutionized many industries across North America and the rest of the World. One of the Industries that experienced massive transformation was the Financial Industry.
The internet made investing in the financial markets accessible to millions around the world. This facilitated the migration of many discount brokerages services online. This led to an explosion in the number of online brokers and Do-It-Yourself Investors on the internet.
Equity investments are subject to market risks and may not be suitable for all investors. If you have any doubts as to the merits of an investment, you should seek advice from an independent financial advisor. So please invest at your own risk.
In today’s article, we will give you a step-by-step guide on buying stocks on one of the most popular brokerage platforms in Canada, Questrade.
Questrade financial group is an Online Broker founded in 1999, offering low fees brokerage services—a favorite among active traders and casual traders alike. Questrade is known for its low fees compared to other online brokerages and is considered Canada’s low-cost leader in online investing.
The Questrade trading platforms are easy to use and intuitive, providing the user with all they need to participate in the most important financial markets in the world. The platform gives you access to 8 stock exchanges, including the Toronto stock exchange, NYSE and NASDAQ.
Users can easily buy and sell stocks, stock CFDs, Options, Bonds, Exchange-traded funds, and Mutual funds.
Questrade as a platform also offers portfolio management services through Questrade Wealth Management Inc, which performs everything from trade execution to financial reporting for account holders.
This means you can have your investment portfolio managed for you by Questrade Wealth Management Inc’s team of professional managers. This is done at a fee (a percentage of assets under management billed quarterly).
Questrade financial group is overseen by the investment industry regulatory organization of Canada(IIROC) and the Canadian investor protection fund (CIPF). This means investors are protected from the firm’s insolvency to the tune of CAD 1 million. Questrade also goes an extra step with $10 million worth of private insurance for their account holders.
The minimum deposit to open a brokerage account and start trading in Questrade is $1000.
- Lowest and most transparent commissions
- Large number of tradable security types
- Robust suite of research tools
- Low margin rates, from 0.75% to 1.59%
- Access to 40,000+ funds worldwide & 7,700+ funds with no transaction fees
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STEP BY STEP: HOW TO BUY A STOCK
1. Access Your Questrade Account.
- Login to your account on the Questrade website.
- Navigate to the Trade hub by clicking the “Trade” button.
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2. Find the Stock You Want to Buy
- In the search box, type in the Company name of the Stock/ ETF you want to purchase.
- You can also search the Ticker Symbols of the company. For example, TSLA for Tesla, AMZN for Amazon, etc.
- Click Search.
- Charts, Signals, and Data on the particular stock will appear, showing everything from its price fluctuations throughout the day, the asking price, and the stock’s bid price.
- The trading platform also gives you access to other research tools you can use to evaluate the stock.
- Once you have reviewed the market data on the stock market and are satisfied with the market price, you can now make your order.
3. Choose Order Type
- Navigate to and Click the “Buy/Sell” button.
- Then navigate to Order Entry Tab.
- Here you can see the Bid and Ask prices of the stock.
- You can also now choose the “Order type” and Input the “number of shares” you want to buy.
- There are two main order types, A Market order and Limit Order. A Market order is executed immediately and at the best available market price. A limit order is only completed when the stock hits a particular price (the “limit price”); unless this price is reached, the charge is not made.
- There are other order types that you can use, such as stop limit order, trailing stop order, stop (loss) order, trailing stop-limit order, a limit on the open order, and a limit on close order but the two main (Market and Limit Order) serve the needs of most online brokers well enough.
- Input the number of shares you want to purchase.
- Choose the “Order type.”
- Set the Duration. This is the amount of time an order remains active, waiting to be filled. Should the order go unfilled, it gets canceled when the duration ends.
- Click “Buy.”
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4. Review Your Order
- You will now get a final message that allows you to review the details of the purchase and also see the trading fees that are going to be charged.
- Having reviewed the order and are satisfied with the details.
- Click “Send Order.”
5. Confirm Your Stock Purchase.
- Once the order is filled, a notification message will pop up with details of the transaction.
Building an Investment Portfolio
By taking advantage of the low fees on the platform and repeating the above process, an investor can easily build up their portfolio of securities.
It is important to remember that investing has both risks and rewards. The investor needs to evaluate the kind of risks they are willing to take and the appropriate strategies they should employ to achieve their investment goals.
The long-term success of an investor will depend on their investment strategy, knowledge base, and experience level, as there are a lot of things to consider when buying stocks and ETFs.
It takes a lot of experience to research stocks properly, to know which ones are worth acquiring and which are not.
It also takes significant experience to trade stocks profitably in different market cycles.
Additional FEES and COSTS
Although Questrade is known for being a low-cost investment platform, there are certain fees and costs you need to consider while trading. They include:
Margin rates. If you open a margin account with Questrade, you will be allowed to borrow money from the brokerage to trade with, and you will have to pay a 9.3% margin rate on your negative account balance.
Currency exchange fees, ecn fees, and Securities and Exchange Commission(SEC) fees may apply, especially when buying U.S stocks.
A 175 basis point FX fee is charged for the conversion of CAD to USD. This fee can be avoided if you hold US dollars in your Questrade account.