2019: Can I buy Canadian stocks on Interactive Brokers? Does IB offer trading penny stocks, medical marijuana stocks (Aurora Cannabis, Canopy Growth, Cronos, Tilray) from Toronto Stock Exchange?

Can I Buy Canadian Stocks at Interactive Brokers?

Interactive Brokers has one of the most thorough and extensive lists of exchange connectivity options. What’s even better though, is that investors have the ability to select exactly which exchanges they want to connect to and what types of data they want to receive, a la carte style.

Recent trends in the market have many investors focused on finding ways to gain exposure to Canadian stocks, or more specifically cannabis stocks. This last October, Canada formally legalized the adult use of marijuana, becoming the largest industrialized country in the world to incorporate the notorious plant into its economy. If successful, companies in Canada’s long list of cannabis-related enterprises would have an early advantage in positioning themselves as market leaders in the multi-billion dollar global marijuana space.


Getting the Data

To take advantage of this potential opportunity, investors are looking for ways to secure access to the exchanges where these companies are directly listed. The largest Canadian exchange, where companies like Aurora Cannabis, WeedMD, and Lotus Ventures are listed, is the Toronto Stock Exchange (TSX).

Interactive Broker’s offers connectivity to the Canadian exchange for $20 per month which is the baseline package. This gives investors real time top of book data, also known as Level I. With Level I, not only will investors be able to trade stocks directly on the exchange, but through their Trader Workstation platform, they will also have the ability to visualize charts and keep a real-time update on the current best bid and best ask price of any given stock. This base package should be plenty for most investors for their longer term trading.


Buy Cronos on Interactive Brokers


For the more active investors, however, there are more levels of data available for purchase. Daytrading Canadian companies, especially during the volatility of the cannabis boom, will be much easier with the additional Level II data packages. Interactive Brokers offers this data subscription, which includes the depth of book. It is important to note that Level II data must be purchased in addition to the $20 per month Level I subscription mentioned above. The additional data package displays all current bids and offers for a given stock. As a bonus, Interactive Brokers is also waiving connectivity to the Canadian Securities Exchange (CSE) through the end of December 2019. The CSE is a smaller Canadian exchange but is the direct listing for many micro cap or emerging companies.


Interactive Brokers Cannabis Stocks Without Packages

Fortunately, investors at Interactive Brokers and other brokers can buy Canadian stocks that are traded as ADR's. There is no difference for investor when buying ADR's versus buying stocks other than 2 to 10 extra cents charged on sale transactions. All popular Canadian cannabis stocks are available as ADR's at Charles Schwab: Aurora, Canopy Growth, and Cronos.


Competitors

Firstrade is cheaper than any broker, charging $0 commission for stocks, ETFs and mutual funds.


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The Risks

When trading Canadian stocks on the TSX or any other Canadian stock exchange, it is important to keep in mind that Canadian listed stocks are quoted in Canadian dollars. And while Canadian dollars are relatively close to the value of American dollars, without a proper hedge, your portfolio could be exposed to currency risks that are independent of the individual company's performance.

Trading on a Canadian stock exchange is not the only way to gain exposure to the Canadian cannabis markets, however. Some Canadian companies, like Tilray, have had their Initial Public Offerings on the New York Stock Exchange which means they can be traded directly on American exchanges. No special connectivities needed.


Buy Canopy Growth on Interactive Brokers


Another workaround to trading directly on Canadian exchanges is to find companies that have issued American Depository Receipts, or ADRs. ADRs are secondary listings on American exchanges that can be traded just like American stocks. However because their holdings are primarily denominated in their domestic currency, dividends and company performance will still carry the risks associated with currency fluctuations.




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