48 Yonge Street
Customer Service Hours of Operation:
Scotia iTrade – Review of Pricing
(updated April 15/14)
Scotia iTrade has been a growing presence in the Canadian online discount broker arena after acquiring both Tradefreedom and E*trade Financial’s Canadian division – two brokers that were aimed at active investing and trading. Scotia iTrade’s parent firm is Scotia Capital Inc and is a subsidiary of the well-known Canadian bank Scotiabank.
Similar to other bank-owned Canadian online discount brokerages, Scotia iTrade offers lots of products to invest in, including stocks, options, ETFs, bonds, mutual funds and precious metals. Trading can be done in registered accounts such as tax-free savings accounts (TFSAs), registered retirement savings plans (RRSPs) and registered education savings plans (RESPs) or outside of registered accounts, in either cash or margin accounts. To be able to “short” a stock or to trade advanced options strategies, individuals require a margin trading account specifically designated for options and/or shorting and those margin accounts usually have higher funding requirements (i.e. you need more capital to keep it open) than their cash accounts.
The pricing structure for Scotia iTrade is complex compared to some other Canadian discount brokers, and what you pay is determined by how frequently you trade or by how much you have in assets across iTrade accounts.
Frequent/active traders (those who place 150+ trades per quarter) who are also signed up for paperless documentation can expect to pay the best rate of $4.99 per trade (not signing up for paperless documentation means that you pay $6.99 per trade for 150+ trades per quarter.
Those who make more than 30 trades but less than 150 trades per quarter can expect to pay $9.99 per trade. If you have more than $50 000 in combined assets across iTrade accounts, you also qualify for the $9.99 commission level.
For infrequent traders (those who execute less than 30 trades a quarter) who have less than $50 000 in assets across iTrade accounts, you can expect to pay a minimum of $24.99 commission per trade as long as your order is 1000 shares or less. If you wish to purchase more than 1000 shares (and you’re trading less than 30 trades a quarter), the fee changes to $0.03 per share – meaning the upper limit on what you pay for a commission on a trade can be quite high depending on the order size. Also to be on the lookout for are the fees you pay if you wish to trade US stocks from your Canadian account as there are conversion fees that you’ll have to account for when placing these types of trades. A silver lining to the pricing maze is the commission-free trading of certain ETFs which we’ve provided more information on in a link to below.
The bottom line
If you don’t have $50 000 in assets and even if you do, you may not receive the best commission tier available. To get the best rate, you have to trade – a lot. Having an iTrade account puts you on a fee treadmill of sorts – you have to make trades in order to keep commission costs low. In fact if your account has less than $10 000 in it and you don’t trade once in the quarter you get charged an inactivity fee of $25 per quarter. When looking at Scotia iTrade be sure to understand your likely trading activity and your assets available to invest.
Scotia iTrade Website Links:
Here are some useful links to important information on Scotia iTrade’s website.
Discount Broker Customer Survey Ratings by J.D. Power:
Link to 2013 online broker ratings by the Globe and Mail:
More Online Broker Profiles
Click on a logo below to see another broker profile