Step-by-Step: How to Buy Stocks in Canada
Step 1: Choose a Brokerage
| Brokerage | Canadian Stock Fee | US Stock Fee | Fractional Shares |
|---|---|---|---|
| Wealthsimple | $0 | $0 (1.5% FX fee on free plan) | ✅ Yes |
| Questrade | $4.95-9.95 | $4.95-9.95 | ❌ No |
| CIBC Investor’s Edge | $6.95 | $6.95 (+ FX) | ❌ No |
| TD Direct Investing | $9.99 | $9.99 (+ FX) | ❌ No |
| Interactive Brokers | $1 | $1 | ✅ Yes |
Step 2: Open an Account
| Account | Best For |
|---|---|
| TFSA | Tax-free capital gains and dividends |
| RRSP | Tax-deferred, US dividend withholding tax exempt |
| Non-registered | After maxing registered accounts |
| Margin account | Leveraged trading (advanced) |
Step 3: Fund and Buy
- Transfer funds via EFT or bill payment
- Search for the stock by ticker (e.g., RY, SHOP, AAPL)
- Choose order type (market or limit)
- Enter number of shares
- Review and confirm
Order Types
| Order Type | Description | Best For |
|---|---|---|
| Market order | Buy immediately at current price | Quick execution |
| Limit order | Set maximum price you’ll pay | Price control |
| Stop-loss | Sell if price drops to set level | Protecting gains |
Buying US Stocks from Canada
| Method | Description | Cost |
|---|---|---|
| Direct in USD | Buy on NYSE/NASDAQ through your brokerage | FX conversion fee (1.5-2.5%) |
| Norbert’s Gambit | Convert CAD to USD cheaply via DLR/DLR.U | ~$10-20 flat |
| CDRs | Canadian Depositary Receipts on NEO Exchange | $0 FX (hedged) |
| Wealthsimple Plus | Reduced FX fee with subscription | $10/month |
Common Mistakes
| Mistake | Better Approach |
|---|---|
| Buying individual stocks only | Diversify with ETFs as your core |
| Day trading with no strategy | Buy and hold for long-term |
| Ignoring fees/FX costs | Calculate total cost including conversion |
| Investing money you need soon | Only invest with 5+ year horizon |
| Checking portfolio daily | Set it and review quarterly |