Options Brokers - Canadian Style

Discussion in 'Online Brokers' started by Miles, Sep 27, 2017.

  1. Miles

    Miles Member

    Hi Everyone,
    I'm a new member and first time poster, but am looking forward to getting to know the community. I've invested for myself since 2009, but only started playing around with options about a year ago. I'm looking to make options a bigger portion of my portfolio, and take a more serious, consistent approach to it going forward. I'm still deciding on appropriate strategies - so any advice or recommendations would be welcome - but I'm currently leaning towards a mix of the RTTs and bearish butterflies.

    My main question if regarding brokerages. As a Canadian, I've been with one of their discount brokerages (Questrade) since I began. It was great for stocks, but option-wise, they charge about $10 ticket + $1/contract. Their order entry is pretty clunky and there is no probability modelling, so I've been doing all my analysis in ToS, creating a new paper account every 60 days. That said, I've begun looking into other choices. I would be trading a small account to start - likely 10 - 15k USD, so commissions will play a large role in my smaller trades, particularly if I need to adjust frequently. I'm curious if anyone in the community has been through the same situation. I've looked into most of the choices up here, and it's pretty uniform. Even TD charges $10 + $1.25/contract, but I still consider them for the free data and ToS software. Interactive brokers is the ONLY choice right now that has no ticket charge and $1.25/contract. Tastyworks has said they don't expect to be in Canada before mid 2018 due to hassles with Canadian regulators, and that could easily get delayed further. Any suggestions from those of you already using ToS or IB? Would access to ToS and free data be worth the extra commissions, or will I benefit more from using IB and paying a bit each month for data? I understand this is a bit subjective and open to personal preference, but any input would be appreciated!

  2. Gabor Maly

    Gabor Maly Well-Known Member

    Hi Miles,
    IB data feed costs should not be significant unless you are trading multiple markets (international markets, level 2 deep books are the pricey ones) and there are quote bundles that are waived if you generate at least 30USD per month. So on the cost side IB is better.
    There are other considerations however. TOS is a much better interface (although once you get used to IB you can get to like it) and you will be able to analyze your positions without any 3rd party softwares like OV, ONE, although these softwares are strongly recommended. It is harder to make a mistake with TOS than it is with IB when executing your trades. Your 3rd option is to go with Lightspeed LivevolX platform. They clear through IB, so in this option you get 2 platforms. Cost is better than IB only if you trade large.
    You can download a demo for IB and LivevolX I suggest you play with them and compare it to TOS before making a decision.

    Hope this helps,
  3. Miles

    Miles Member

    Thanks for the information Gabor. Would third party analytical software still be strongly recommended if I chose ToS? I understand that certain strategies are built in one software and don't translate perfectly to others, but is this prohibitive to success with them in your experience?

    Regardless, it sounds like I should play with the IB or LivevolX demos to see what they're like. If OV/ONE is something that is unanimously recommended, regardless of platform, perhaps ToS analytics would be redundant and I should stick to IB for the commission cost savings. If I can get by with ToS analytics for at least a year (keeping in mind that I'm a novice options trader), I can always go that route for familiarity and revisit the issue later, once I have some experience under my belt. I guess at the end of the day, if I can grow the account and slowly increase my trade lot size, the influence of commissions, and specifically ticket charges will diminish over time - just seems like a big deal on a small account. Thank again for the advice. If anyone has any insights, they'd certainly be welcome!
  4. status1

    status1 Well-Known Member

    Just out of curiosity
    Are you saying that the Canadian version of TOS has not lowered their rates like the US ?
    I guess maybe there not many discount brokers to compete with
    Even with the higher commission TOS is still better than most The main thing is the risk graph Without that you are pretty much lost in the trade
    I used TOS when they had $9.95 ticket charge so that was not an issue for me as I try to be a little OTM so there is no need to make any adjustments
    Of course you have to keep the contract size small which is a good thing anyway as you are just starting out
  5. Miles

    Miles Member

    Yes, you are quite right, ToS hasn't lowered rates up here unfortunately. I've been on and off the phone with a variety of the big banks and brokerages the past week to get details, but a $7 - 10 ticket charge is almost unanimous up here in Canada. Currently IB is the only realistic option for contract only commissions, with Tastyworks presenting a potential competitor if they can clear all the regulatory hurdles in the coming year. I think Virtual Brokers also does a no ticket charge commission, but only if you subscribe to a special platform they provide for $150/month. I've had a year of dealing with the $9.95 ticket charge, so I'm accustomed to it as well. The big thing for me is getting analytical software with actual real time data that I can rely on. Paper ToS accounts that expire every 60 days, requiring me to create a new fake email and profile to re-enroll is tiresome. I'm on my 6th rendition already, lol...
  6. Gabor Maly

    Gabor Maly Well-Known Member

    You can definitely get by using TOS analytics however if you want to get serious a backtesting software is a must regardless of platform choice. As you say it you do not need to jump into the water immediately get a feel for it first (with TOS) and build from there gradually.
    Note: you mentioned you want to trade RTTs and BBs. RTTs will be OK on TOS analytics, the rule set and guidelines you will get for John Locke's bearish butterflies however have been developed on the OV platform that has its own distinct modeling. With TOS you will get different results.
  7. status1

    status1 Well-Known Member

    I am not sure how it works over there but over here if you open a minimum account (I think it's $2000) you would not have need to make any trades but you could use the paper trade account all the time and better yet you could use the risk graph with real time data to track your trades whether you place them at TOS or not
  8. Miles

    Miles Member

    Thanks, those are both good points. The only account up here that permits ToS use is a USD Margin account with a minimum balance of $5000. I think I will probably start this way and focus more on the RTT since it runs a little more conservative than the BB. If I can make some decent profit in the first year, I'll begin putting it towards an OV subscription and work my way into the BB.
  9. Carsten5000

    Carsten5000 Member

    I'am happy with the Combo TastyWorks as Broker and ToS for tracking and analysing....
  10. keyur390

    keyur390 New Member

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