If you want to trade Canadian shares as a CFD here’s a quick rundown of three decent brokers to trade through.
Three Top CFD brokers for trading Canadian stock CFDs
- IG – huge range of Canadian stocks as a CFD or spread bet
- Saxo – equally large range as a CFD, physical stock plus options trading and DMA too.
- Capital.com – (a new mobile first broker) have just added some of the major Canadian shares as a CFD a really intuitive app and some post-trade artificial intelligence
Why trade Canadian shares as a CFD I hear you say, eh?
Well, here are some of the advantages and disadvantages of trading Canadian CFDs.
Advantages of trading Canadian CFDs
- Canada is a lovely place
- If you trade in GBP denominated CFDs you don’t have to worry (too much) about currency exposure
- There are lots of emerging markets in Canada, like cannabis stocks and ETFs for example
- There are tax headaches involved in purchasing physical foreign shares, trading CFDs or spread bets mitigates this
Disadvantages of trading Canadian stocks as CFD
- If you are based in the UK you’ll never have your finger on the market pulse as well as you do with your local market
- CFDs are a leveraged product and you can lose all your money quickly. Especially with volatile new markets (like Cannabis again)
- You’ll pay overnight financing on positions which can add up in the long term. If you are a long-term buyer buying the physical stock may be a better option (although you do have FX and custody costs to consider)
- Some brokers won’t let you vote on corporate actions if you hold CFDs. Some will if your position is big enough. But if you think this will be an issue make sure you double check before trading.
There are of course many other brokers you can trade Canadian stocks through. You can compare more CFD stock brokers in our CFD comparison tables.
Here’s what Capital.com (read our Capital.com review or interview with their CEO here) have to say about the TSX60. Which is of course as you know the main index of listed Canadian stocks.
Some of the top Canadian stocks listed on the TSX 60 – the stock market index of the 60 biggest companies listed on the Toronto Stock Exchange – are the banking stocks. Many people trade Canadian stocks from the banking sector because they are historically quite secure. With the year’s close bringing with it all the final quarter reports, all it may take is some underperformance to stir volatility in some of these markets.
They also highlight four of the major Canadian stocks that are available to trade as a Canadian CFD
- Bank of Montreal (BMO)
- Canadian Imperial Bank of Commerce (CIBC)
- Royal Bank of Canada (RY)
- Laurentian Bank of Canada (LB)
If you do decide to go instead with a Canadian stockbroker then you’ll need to be trading in Canadian Dollars. Or Loonies as the slang apparently goes for the Canadian currency. Which means sending funds internationally. Whilst most brokers do offer exchange rates that are better than your bank for physical conversions it pays to take control of the exchange rates you get.
Further reading for your interest in large international money transfers I would suggest:
Richard founded the Good Money Guide (previously Good Broker Guide) in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.