Options trading for beginners in Canada (Cheapest option)

Options trading is a form of investment that involves buying and selling options contracts on various financial assets, such as stocks, ETFs, commodities, or indices.

6/26/2023

stack of books on table
stack of books on table

Options trading is a form of investment that involves buying and selling options contracts on various financial assets, such as stocks, ETFs, commodities, or indices. It is most commonly used by investors who want to turn a small amount of capital in hopes of making a considerable amount. It is the favorite tool of Wallstreetbet users on Reddit and has made multiple millionaires in the past 10 years. Traders can take speculative positions on the future price movement of an asset, allowing them to profit from both upward and downward price swings.

In the US, the most popular app is called Robinhood and it is mostly used to trade options. Unfortunately in Canada, Robinhood is not available and we have fewer options and it can be very costly if you do not know which one to use.

Unless you are trading with a huge amount of money and a 10-dollar fee will not be much of a difference to you, you should avoid all the banks in Canada as they all have high fees. These high fees will eat into most of your profit if you don`t have a significant amount to trade. After analyzing at least 10 different brokers in Canada, the 2 best choices you have will be Interactive Brokers or Wealthsimple

Wealthsimple offers a simple and intuitive trading platform suitable for beginners while Interactive Brokers target more experienced traders.

While Wealthsimple is the best option for ETFs and stocks, when it comes to options trading, the range of options available is more limited and more expensive compared to Interactive brokers. If you have no interest in trading options, you can click here to create an account with Wealthsimple

Comparing the 2 prices, Per contract Interactive Brokers – 0.65 USD per contract and Wealth Simple – 2 USD per contract

Moreover, Wealthsimple will charge you a 1.5 % fee to convert your Canadian dollar to USD at a much higher rate. On the other hand, Interactive Brokers have the best exchange rates when converting from Canadian dollars to USD.

Interactive brokers wins this battle if you want to save the most money. Click here to open an account with interactive brokers and you can earn up to $1000 dollars.