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Virtual Brokers Pricing Review
[updated Jan. 2014]
Virtual Brokers, a division of BBS Securities Inc, is one of the newest and fastest growing Canadian online discount brokers. Like its competitors, Virtual Brokers offers clients the ability to trade in both registered accounts and non-registered accounts. In addition, Virtual Brokers offers trading in stocks, ETFs, bonds, mutual funds and options.
Registered accounts include tax-free savings accounts (TFSAs), registered retirement savings plans (RRSPs) and registered education savings plans (RESPs). While Virtual Brokers offers US dollar accounts for all registered accounts, they do so for a fee (see table below). For registered accounts you cannot use margin or short stocks. Options trading in registered accounts is limited to buying and selling options and writing of covered calls.
The non-registered account offered by Virtual Brokers is called the “All in One” account which is a combination of equity, option, margin and short accounts all rolled into one. This gives individuals the opportunity to access margin (should they want to) to finance a trade that they may not have the ability to do otherwise.
Of all the Canadian discount brokerages, Virtual Brokers offers three competitive pricing plans: “The Penny” plan, a “per trade” plan and a “per share” plan. The penny plan rates vary from a minimum of $0.01 per trade to a maximum of 9.99 per trade (with no ECN fees). The pricing for the penny plan is based on the volume of shares you buy, and the price of the share you’re buying. If you buy small amounts of stocks under $1, this pricing structure could be very appealing. On the other hand, if you typically trade large volume orders then this plan is more or less in line with other discount brokerages. A better option for large volume orders might be the “per trade” plan which charges $6.49 per trade regardless of the order size or transaction volume. Fees such as ECN fees or exchange fees are charged in addition to the per trade price. Check out the following link for an in-depth look at the pricing of “The Penny” plan.
A neat feature of the plans with Virtual Brokers is that users can select the plan they would like to use for the trading day when logging into the VB trading system, so users can select the plan (and therefore pricing) that fits their intended trading pattern for the day.
What’s the catch? Well, there is an important one – data fees. While snap quotes are free for their Meridian & Web Trader, streaming quotes are not. In order to get streaming quotes, you’ll need to subscribe to a data package. Pricing for data packages starts at $18.25/mo for the basic package and can go as high as $104.50/month for comprehensive access to streaming market data. Individual exchange data is available for purchase too if you’re only interested in specific exchanges. Thus, deciding whether or not streaming (real-time) quotes are necessary is important because you could end up spending a minimum of $54.75/quarter plus whatever you pay for commissions.
The Bottom Line
Overall Virtual Brokers’ pricing and flexibility are going to be tough to match and beat for many Canadian discount brokerages, especially for certain types of order sizes and trading/investing styles. With a low minimum opening balance of $1000, flexible and sometimes rock-bottom pricing, and no minimum trading requirements it certainly seems like they’re hitting the right notes with costs. For active traders and those looking for real-time data, however, be sure to consider the costs for data subscription for streaming quotes as part of the total cost of ownership with this provider.
Discount Brokerage Pricing Review Table
Virtual Brokers Website Links:
Here are some useful links to important information on Virtual Broker’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
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