Canadian Stocks: The TSX (Toronto Stock Exchange) is number one for penny stock trading.
The TSX is home to mining and energy related stocks, but also is home to a strong and growing number of technology stocks mostly related to software, internet software and services, communications, and IT services, and green (alternative energy).
The TSX seems like part of the USA exchanges to me because, in the past, I have traded mining stocks regularly from that exchange... But the TSX is a foreign exchange, so - for USA citizens - Canadian stocks trading must be conducted either:
• by phone to a US broker that is registered to trade Canadian stocks.
• online direct through a Canadian stocks access broker.
• through a Canadian broker IF you have a current residence in Canada or a bank account with a Canadian institution.
If you are a US Citizen living in the US, but also a Canadian citizen, you are still not eligible to trade Canadian Stocks through a Canadian broker per the Securities Exchange Act of 1934. You must either live in Canada, have a current residence in Canada, or a bank account with a Canadian institution. That is it. Your citizenship is not a requirement.
I will introduce you to the best brokers to trade Canadian stocks on this page. Please read the suggestions offered but do your own research as well.
If you live in the USA and plan to trade Canadian stocks, you best find a broker that has access to the TSX and charges a minimal amount for phone trades, or online direct trades.
mbtrading.com is the best US broker I can think of to trade Canadian stocks.
mbtrading foreign Stock Exchange Fees are $4.95 commission + 0.01 per share. That is it.
I cannot find better rates for trading foreign stock exchanges for normal trading of foreign stocks.
Just2Trade.com offers the best deal for those trading foreign penny stocks that are mere pennies per share, or for those buy larger lots of shares at a time. . .
Just2Trade charges a flat $75 per trade plus a $2 commission.
There may be a $0.003 per share of entire order for shares traded under $1 (as is the case with the US stocks). However, the maximum commission per order will not exceed $5.50, with a minimum commission of $2.50. At most then, you will pay the $75 foreign stock transaction fee plus $5.50 commission.
Your trading goals determine which broker best meets your needs
mbtrading one cent agency fee per share is very low, and is suitable for most trading of Canadian and other foreign stocks.
However, this 1 cent fee per share, as low as it is, may not be practical trading stocks that have a share value that is fractions of a cent to around 10 cents.
Just2Trade's $75 flat foreign stock fee is especially suited for penny stock trading. For instance, you could realistically buy 100,000 shares of stock at 1 cent per share, which would equal $1000 worth of stock. The $75 fee is not so bad to take.
If you do the same transaction with mbtrading, you will be paying 1 cent per share in fees for every share you purchase for 1 cent... So you own $1000 worth of stock that you also pay $1000 in fees.
I am definitely not knocking mbtrading. They have the lowest fees in the US for foreign stocks. Plus, mbtrading is a great broker to trade with... But for penny stock trading, in which your plan is to pay just pennies per share, then Just2Trade works out to be the better deal by far for you.
The BEST DEAL of all though is if you either have a residence in Canada or a bank account with a Canadian Institution. You do not need to be a citizen of Canada. If you do this then the BEST Canadian stock broker for penny stocks is Questrade.
Questrade: If online trading, the maximum commission is $9.95 per trade. If trading by phone, you pay an additional $25.00 per trade.
The TSX is the largest stock exchange in Canada and the 3rd largest stock exchange in North America.
• About 1,500 stocks are traded on the TSX compared to 2,800 stocks traded on the Nasdaq.
• Over 4000 companies are traded on the TSX and TSX Venture (small company stocks) combined.
• About 40 percent of all TSX shares are traded in the USA.
• About 66 technology stocks are listed on the TSX
• About 120 technology stocks are listed on the TSX Venture
TSX purpose is to:
• provide an exchange for senior company stocks or well developed companies with a history.
• provide an exchange, through its TSX Venture, to trade developmental / exploration companies - more on that later.
TSX specializes in Mining and Energy stocks
My belief is that no other exchange exists that lists near as many stocks in the mining and energy sectors. This is the place to go to trade those sectors of stocks if that is your interest.
To trade Canadian Penny Stocks successfully, you must know the better senior and venture mining and energy stocks very well. Call them up and establish friendships with at least one high end manager within a target company.
This strategy allows you to gain essential information to base your trades on. If you do this, you can expect some super outstanding profits with limited risks.
Regarding technology stocks on the TSX, the equity capital available to fund such companies had really dried up since the economic downturn began in 2008.
For example, in 2010, equity capital raised for all technology stocks combined on the TSX and TSX Venture decreased to approximately 1/5th of what it had been receiving in 2007 and earlier. Share values of these technology stocks have plummeted as a result.
In light of the global economic recovery, that dire situation is dramatically changing for the better, but still could see room for improvement.
What does this recovery in technology stocks mean for the extraordinary investor trading Canadian stocks?
The extraordinary investor sees that most of the investor money is now beginning to flow more freely into technology stocks, and also into the oil, gas, precious metals.
Precious metals and energy have started trading lower, but are still high priced. These continued higher prices as the economy recovers is all beneficial for mining companies that seek financing and ultimately profits from exploration and development of mining operations.
As you see the economy improving even more, then
• investment capital will become more available
• precious metals will eventually trend down again from their unbelievably high levels
• investors will feel more confident about the economy.
As a result, an explosion of money will be freed to invest and trade the high demand technology stocks once again.
Of the Canadian stocks, the technology stocks are presently overlooked diamonds, even more so than in the US markets simply because they are presently so overshadowed by all the investing in the mining and energy stocks on the TSX. As a result, my belief is that we are going to see more explosive growth in Canadian Technology Stocks than in the USA as money flows out of mining stocks.
Technology Stocks - the Sleeping Giant
Technology stocks are now sleeper stocks waiting to be awoken. Technology stocks are still the wave of the future and highly demanded to solve critical problems that were discussed in my last page titled "Technology Stocks."
Huge returns can potentially be earned by a penny stock investor trading Canadian stocks on the TSX IF he makes himself very familiar with the mining, energy and technology stocks on this exchange. To do this, you really want to become intimately familiar with the target companies of your choice before ever considering investing.
Unlike the TSX Venture, the TSX caters to well established Canadian stocks that have a history - and many are within the classification as penny stocks. Numerous Canadian stocks can be found, mostly trading at fair to high liquidity.
Scams involving TSX listed stocks and other Canadian stocks are quite low because:
• greater volume trading and liquidity.
• many penny stocks on this exchange are genuine companies with potential.
• many of these companies make a profit.
• The TSX stocks have a long history as solid companies.
• the future of stock trading on the TSX looks bright in general due to rising costs of precious metals and other minerals, and timber, natural gas, and oil.
• Finding the necessary history and information on your target stocks is not difficult.
• Technology stocks on the TSX are soon due for a surprising re-entry as the high demand sector they are with explosive returns to follow when the economy recovers. Since the technology stocks on the TSX are of high quality, and no more that 66 of them exist on the TSX, you do not have to do tons of research into thousands of stocks to invest in a few of the best of those stocks. Researching 66 stocks is not overwhelming.
• By investing at the right time, you will position yourself in the best of those technology stocks for a fast ride up to many times over your original investment.
• Penny stock investors are optimistic about trading on the TSX. The TSX is thriving and the market is very stable, liquid, and well regulated.
TSX review board favors companies that require help to grow - the kind of companies extraordinary investors and other penny stock traders seek. . .
Couple that with the fact that the TSX review board is dedicated to reviewing the status of a company and its financial health and its management with its listing requirements as a guide, and you can be assured that most stocks on the TSX are high quality companies - not scams.
To review the lengthy listing requirements for this sock exchange, please see:
When you are ready please continue onto the next lesson: TSX Venture - realistic 300% profits or far more!