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Posts Tagged ‘Scotia iTRADE’

Front plaza of Scotiabank Place on Draft night.

Scotia iTRADE, a so-called discount brokerage, announced that they will be raising their per-trade fee on October 27, 2011, from $19.99 to $24.99, on those customers with less than 50,000 in combined cash/equity assets.

As a Scotia iTRADE customer, I found out about this change through a letter that was mailed to me.

On June 8, 2010, I documented how Scotia iTRADE was charging more for Canadian equity trades than U.S. trades, despite U.S. trades presumably being more costly for the Canadian brokerage. At the time, there was no 2-cent fee per share over 1000 shares on a U.S. equity trade compared to a Canadian equity trade.

They subsequently eliminated the difference by making the per-trade fee the same in both cases, as you may have expected.

In addition to the new $24.99 per-trade fee for all equity trades for customers with less than $50,000 in combined cash/equity assets, they are increasing their per share trading fee for more than 1000 shares by 50% — from two cents per share to three.

Without a significant independent Canadian discount brokerage — as Scotia iTRADE’s predecessor, E*TRADE Canada, used to be, I would expect that the brokerages of the other four major Canadian banks will follow suit in increasing their prices, due to Canada’s government-enforced banking oligopoly.

For insight into E*TRADE’s average customer profile, see how they assume an annual income of $200+k and a net worth of $1+ million when you open a new account.

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Previously, I wrote  how Scotia iTRADE lets you buy stocks with a negative cash balance, and how they charge more for Canadian equity trades than U.S. equities.

They also let you sell the exact same shares on the same day you bought them, before the settlement date of your acquisition.

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Scotia iTRADE, formerly E*TRADE Canada, is a Canadian subsidiary of the Canadian public corporation, the Bank of Nova Scotia.

You’d think that being a Canadian company, it would be no more expensive to trade stocks on Canadian exchanges than U.S. exchanges.

However, as their pricing chart shows, if you have combined assets of less than $50,000 CAD and you made fewer than 30 trades in the past quarter, their commission for Canadian equities over $1.00 is $19.99 CAD, up to 1000 shares, and two cents per share thereafter. For U.S. equities, it’s $19.99 regardless of the amount of shares purchased.

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