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U.S. guys, how are you buying Fairfax shares?


Guest kawikaho
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Guest kawikaho

I'm advising some folks to buy shares of Fairfax.  However, after the delisting on the NYSE, how are you guys buying your shares?  There's the U.S. pink sheet listing, and then there's the TSX listing denominated in U.S. dollars.  Are there any advantages of going one route or the other?

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Guest kawikaho

Much thanks for the replies!  I am wondering why the pricing between the PK listing and the TSX U listing are always slightly different.  There seems to be some inefficiencies here.  I'll advise for the pink sheets, since buying TSX shares requires a change of brokers for the people I know.

 

 

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Ok, I give up. 

 

Why is it so difficult for American's to buy shares on the TSX?  Is it our Third World status?  You don't like our Prime Minister?  You don't like that we still send all our tax revenues back to our Queen?  You don't like that our Canadian Tire money is now worth more than the US $ ?  You don't like that we close our stock markets for 6 months for winter? What's up?

 

We buy shares up here on American exchanges all day long for $10. or less and you don't need a special broker.  We have accounts that are US dollar based and one's that are Cdn dollar  based so we don't have to convert the currency on each transaction.  It is all very cutting edge for Canadians, eh. 

 

TSX (Toronto Stock Exchange) and the TSX Venture Exchange are the two national stock exchanges here in Canada.  TMX Group operate both.  TMX is a $2B publicly traded company.  About $5B worth of shares are traded daily on the TSX.

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  • 3 weeks later...

It depends on the broker in terms of international trading as there is a significant amount of legal filings that need to be made in addition to the technology set up.  It doesn't make sense from a financial perspective unless your clients are going to trade a significant amount of $ on the foreign exchanges.

 

The majority of retail clients feel most comfortable buying/investing in their own country thus the lack of demand contributes to the lack of development.

 

Personally I use Interactive Broker for acquiring international positions.  If I don't feel comfortable with the currency risk then I hedge by creating a debit in that currency.  Transaction cost currently for Interactive is 1 cent a share with a maximum charge of 0.5% of the trade.

 

http://www.interactivebrokers.com/en/p.php?f=commission

 

I know that Etrade use to offer access to the TSX but that might have changed after the sold their Canadian sub.  I don't have an account this them so I can't speak to much about it.

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rtgross

 

question on IB

 

i have looked at their commission structure, http://www.interactivebrokers.com/en/p.php?f=commission

 

i thought they charge 0.005 per share with a min of $1 and max of 0.5% of  trade value

 

what are your thoughts on IB? I have been thinking about opening an account, however the commission structure is a little confusing. thoughts on other costs?

 

thanks

hy

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I know when I want to trade on the TSX using Etrade, I get screwed once on the currency conversion.  Then the trades are 20 bucks each along with a lot of inefficiencies ( I can't do good for 60 days, i can't switch orders after placing them) .  Finally, I get screwed again on when I convert back.

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I just buy FRFHF rather than buying FFH on the TSX through Etrade.

[/quote

 

why not buy FFH in US $ on the TSX?  FFH-U.TO

It is new, looks like almost no volume but I would think that there must be a broker who will fill your order if you put it in at a reasonable #?  No conversion.  FRFHF.PK is trading pretty a pretty good volume.  As far as paying $20 ?  How many trades are you expecting to make on a $375. stock?

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I just buy FRFHF rather than buying FFH on the TSX through Etrade.

[/quote

 

why not buy FFH in US $ on the TSX?  FFH-U.TO

It is new, looks like almost no volume but I would think that there must be a broker who will fill your order if you put it in at a reasonable #?  No conversion.  FRFHF.PK is trading pretty a pretty good volume.  As far as paying $20 ?  How many trades are you expecting to make on a $375. stock?

 

Well, last I checked there were also odd lot issues for me with Etrade.  I'm not looking to buy 100 shares of FFH anytime soon.

 

Wish I were, though.

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rtgross

 

question on IB

 

i have looked at their commission structure, http://www.interactivebrokers.com/en/p.php?f=commission

 

i thought they charge 0.005 per share with a min of $1 and max of 0.5% of  trade value

 

what are your thoughts on IB? I have been thinking about opening an account, however the commission structure is a little confusing. thoughts on other costs?

 

thanks

hy

 

 

No doubt.  It can be very confusing.  I must have looked at it/read through it at least 4-5 times prior to opening an account there.  The examples on the right side of the commission page give decent clarity.  This brokerage is geared to bigger/active clients and professional traders. 

 

The .005 quote you mentioned is for US trades.  It is .01 for trades on the TSX.  Unless you are trading penny stocks or in very low quantities this will be the rate you will be charged on your trades.

 

Most individuals will be using the pricing under the bundled guidelines.  The unbundled rates are geared to professionals who are doing thousands of trades in large quantities.

 

In terms of opening an account there, I like it but there is definitely a steep learning curve for their platform.  From a cost benefit standpoint you will want to keep in mind that there is a $10 min fee per month.  Translation - If you are a long term buy/hold investor you are better off with Fidelity or Ameritrade as you will be paying at least $120 a year at IB.  (IB offsets the fee against your commissions, ex.  if you have $12 of commissions in the month you will not be changed anything additional.  If you have $4 of commissions you will pay an additional $6 maintenance fee)

 

I have had my account there since last fall (previously I held it at Ameritrade).  My primary reason for switching was the margin rate and the short borrow structure.  I wanted to hold 10-35% of my portfolio in convert arb/merger arb positions and it was much too cost prohibitive to pursue such a strategy at Ameritrade.  In terms of commissions most of my trades come in below $5. 

 

I will warn you.  If you are going to open a margin account be very diligent is accessing your market risk & excess margin availability.  I am very familiar with it but I have read postings from individuals who were liquidated due to their lack of understanding on margin.  (Although they seldom write it that way).  IB will give you about 1-2 hours before liquidating your positions.  Scottrade & Ameritrade by comparison will give most clients several days to correct a deficit.

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Has anyone bought FRFHF.PK in odd lots?  If so, what broker?

 

Yes.  I have used Etrade to buy FRFHF in odd lots. 

 

You can actually trade on the TSX with Etrade, but you can't buy FFH in odd lots (based on when I last tried).

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Any recommendations on brokerages that allow orders to be placed directly on the Toronto Stock Exchange for a US based investor?

 

Are there brokerages in the US that allow for accounts held in US dollars or Canadian dollars?

 

I'm trying to find the best route to buy and sell Toronto listed stocks directly instead of using the pink sheets.

 

 

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Any recommendations on brokerages that allow orders to be placed directly on the Toronto Stock Exchange for a US based investor?

 

Are there brokerages in the US that allow for accounts held in US dollars or Canadian dollars?

 

I'm trying to find the best route to buy and sell Toronto listed stocks directly instead of using the pink sheets.

 

Interactive Brokers (IB) has already been mentioned on this thread. In an IB account you can hold any number of currencies - USD and CAD both ok. IB also offers direct access to stocks listed on the Toronto Stock Exchange.

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Has anyone bought FRFHF.PK in odd lots?  If so, what broker?

 

Yes.  I have used Etrade to buy FRFHF in odd lots. 

 

You can actually trade on the TSX with Etrade, but you can't buy FFH in odd lots (based on when I last tried).

 

Txlaw, I have an Etrade accounts but my FFH stock is in an IRA account and they tell me I can't buy stocks on the Toronto exchange in that account. That doesn't make sense to me. The IRS does not place such a restriction on IRA investments. Any insight other than Etrade not giving me the straight scoop?

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Txlaw, I have an Etrade accounts but my FFH stock is in an IRA account and they tell me I can't buy stocks on the Toronto exchange in that account. That doesn't make sense to me. The IRS does not place such a restriction on IRA investments. Any insight other than Etrade not giving me the straight scoop?

 

I think the rule you bumped into w/ Etrade is that brokers are not allowed to run IRAs as margin accounts. Because IRAs are distinctly American, the brokers typically run them exclusively as USD accounts. Thus if you were to buy CAD-denominated stocks, Etrade would have to lend you the CAD for the purchase. I could be wrong but I think that may be what is going on. Previously I had a similar issue re: managing an IRA with IB - at the time they only allowed one to hold USD assets in IRAs. Not sure if things have changed there ...

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I think the rule you bumped into w/ Etrade is that brokers are not allowed to run IRAs as margin accounts. Because IRAs are distinctly American, the brokers typically run them exclusively as USD accounts. Thus if you were to buy CAD-denominated stocks, Etrade would have to lend you the CAD for the purchase. I could be wrong but I think that may be what is going on. Previously I had a similar issue re: managing an IRA with IB - at the time they only allowed one to hold USD assets in IRAs. Not sure if things have changed there ...

 

I wrote in another thread, that IB will let you trade foreign positions in IRAs at this point if you do a manual forex trade to get the target currency, first.  They also allow you to set up your account as "margin" so that you can trade positions without waiting for the previous trade to formally settle.

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Has anyone bought FRFHF.PK in odd lots?  If so, what broker?

 

Yes.  I have used Etrade to buy FRFHF in odd lots. 

 

You can actually trade on the TSX with Etrade, but you can't buy FFH in odd lots (based on when I last tried).

 

Txlaw, I have an Etrade accounts but my FFH stock is in an IRA account and they tell me I can't buy stocks on the Toronto exchange in that account. That doesn't make sense to me. The IRS does not place such a restriction on IRA investments. Any insight other than Etrade not giving me the straight scoop?

 

I've also called them before about trading on the TSX in my Roth IRA.  They told me that they didn't have that capability but that they were considering adding it.  Whatever.

 

I have no idea why it's not possible.

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