The stock market universe has evolved a lot with technology in recent years. Today stocks can be traded with just a few clicks, unlike in the days when people had to go to brokers and process hard copies.
The introduction of modern stock trading applications and technologies has dramatically streamlined the investment process around the world.
If you are a relatively new investor in Canada, here is what you need to know about stock trading apps.
What are stock market apps?
A stock trading app is a trading platform that allows investors and traders to buy and sell their stocks online on their devices using the internet. They can also manage their investment portfolio themselves without going through brokers.
Investors can place the buy / sell order through trading applications, and on the other hand, the persons responsible for the execution of the order ensure its execution on behalf of the investors.
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What to look for in stock trading apps?
Before signing up, you should review all aspects of stock trading apps to make sure that they are worth your trust, time, and money.
There are many investment apps out there, each with different advantages. For example, some may offer detailed research, graphics, educational resources, etc. while others may come with different trading tools.
However, applications with such advantages are relatively expensive because they involve high commissions and maintenance costs. Investors should also note if there are any transfer and inactivity fees associated with these applications before applying.
Some investment applications require investors to have a certain minimum balance in the account to trade stocks, especially in the case of high risk investment strategies like futures and options.
If you are ready for more advanced and risky transactions like derivatives, the first thing to do is to make sure that the applications allow you to engage in such transactions, as not all applications provide such services.
Some apps also allow you to trade stocks with a registered retirement account which can protect your earnings from taxes.
Prompt response from customer service is another crucial factor to consider when selecting an ideal trading app for yourself, as you wouldn’t want to end up with customer service agents unresponsive.
What are the best stock trading apps for Canadian investors?
Calling one trading app better than another might not be the best way to go because, like most things, their preferences are more generally subjective. A stock trading app with certain features may appeal to one section of users while disappointing another.
Therefore, the best thing to do here is to know about as many options as possible.
- Wealthsimple is an inexpensive and seemingly user-friendly investing app, although some have noted that it lacks some advanced features.
- TD Direct Investing is said to come with advanced features, resources and tools. However, it is known to be quite expensive.
- On the other hand, CIBC Investor’s Edge would be less expensive than TD Direct Investing and very informative.
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Are all stock trading apps secure?
Ideal stock trading apps are developed with investors’ safety concerns in mind. Many of these apps are known to use up-to-date encryptions and two-factor authorization to keep investor money safe.
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However, investors should note that man-made innovations can fail, including the smartest and most secure technologies.
Also, while the means of stock trading have evolved, its practice remains the same. Therefore, the old risks and volatilities also remain the same. Thus, investors should be aware of where they are placing their money when making trading decisions regarding stocks.