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Are you from Canada and interested in trading OTC/Pinksheet stocks?

post #1 of 30
12/28/10 at 6:18pm
Thread Starter 

Are you from Canada and interested in trading Pinksheet/OTC Stocks? Read this, if your from the US this has nothing to do with you.


If you are like me, and if you have done your research you will know that most Canadian brokerages don't allow trading of Pinksheet/OTC stocks, and most of the ones that do, have a string of restrictions on them. Some only allow you to purchase 500k per order, others will 'review' your order if you are purchasing over 1million shares which takes 3-10 minutes, and most make you phone in to purchase and sell these stocks which makes it impossible to day trade.

The first thing you need to know is that as a Canadian you are not allowed to register for any US online brokerages. So right away that option is gone. It's kind of funny that people from France, Italy, etc. can sign up but Canadians can't.

The second thing you need to know is Pinksheet/OTC stocks are not allowed to be traded in TFSA's. It is illegal. The government has made it this way, most likely to discourage people from trading such stocks because of the manipulation/scams in this market.

As for online brokerages, I practically know all of them in Canada. You don't need to worry about that though. I will break down which ones allow you to properly trade them.

Questrade - This online brokerage lets you buy/sell them online, however, if you purchase over 1million shares it goes to a 'review', which usually takes from 3 minutes, sometimes up to 5 minutes. This may not bother you at first when you have a smaller portfolio but once you expand it will make daytrading almost impossible. (I used this brokerage for about 9 months)

NBDB (National Bank Discount Brokerage) - This is the one you want to look at, amazingly, it is the ONLY Canadian online brokerage that lets you freely, without any restrictions on Pinksheet/OTC stocks. It is one of the 'Big Five Banks' in Canada so your money is obviously safe here. However, for people who don't trade a lot the commission is a bit large at $29.99 a trade. If you have a smaller portfolio you may want to start with Questrade ($9.95/trade) and then migrate to NBDB once you expand your portfolio. Check their website to see the exact commission for inactive traders. To become active trader you need minimum 30 trades in a quarter. Active trader commissions are $6.95-$9.95(maximum) which is extremely competitive and very, very good.

Don't even worry about the other Canadian online brokerages, don't waste your time checking them as I have done so already. But for those who insist..

RBC- allows trading of pinks/otc but maximum shares per order is 2.5mil

TD Waterhouse- You have to call in to trade them

BMO- This brokerage says you can trade them freely with no restrictions but I have not tried them out

Credential direct- Review process so you're order will not reach market until they review and accept it

Disnat- Similar story here, maximum amount of penny stock you can have is 400,000 shares

There are too many to list but I've checked them out..


I really hope this helps any Canadian traders out there and saves them the time. I had to research for quite some time to find the ones that are best with Pinksheet/OTC stocks as there was never anything online I could find that discussed trading Pinksheet/OTC stocks with Canadian brokerages, I hope this saves a lot of people a lot of time.


Edited by Royal - 4/20/11 at 11:28am
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post #2 of 30
12/28/10 at 6:24pm
you cannot buy otc stocks in the TFSA account ???? I didn't know.... so you must
buy canadian pennies stocks ...weird.....
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post #3 of 30
12/28/10 at 6:27pm
Thread Starter 
Quote:
Originally Posted by philipper View Post
you cannot buy otc stocks in the TFSA account ???? I didn't know.... so you must
buy canadian pennies stocks ...weird.....
You can buy them in regular cash accounts.. I trade them everyday.
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post #4 of 30
12/28/10 at 8:13pm
Quote:
Originally Posted by Royal View Post
Are you from Canada and interested in trading Pinksheet/OTC Stocks? Read this, if your from the US this has nothing to do with you.


If you are like me, and if you have done your research you will know that most Canadian brokerages don't allow trading of Pinksheet/OTC stocks, and most of the ones that do, have a string of restrictions on them. Some only allow you to purchase 500k per order, others will 'review' your order if you are purchasing over 1million shares which takes 3-10 minutes, and most make you phone in to purchase and sell these stocks which makes it impossible to day trade.

The first thing you need to know is that as a Canadian you are not allowed to register for any US online brokerages. So right away that option is gone. It's kind of funny that people from France, Italy, etc. can sign up but Canadians can't.

The second thing you need to know is Pinksheet/OTC stocks are not allowed to be traded in TFSA's. It is illegal. The government has made it this way, most likely to discourage people from trading such stocks because of the manipulation/scams in this market.

As for online brokerages, I practically know all of them in Canada. You don't need to worry about that though. I will break down which ones allow you to properly trade them.

Questrade - This online brokerage lets you buy/sell them online, however, if you purchase over 1million shares it goes to a 'review', which usually takes from 3 minutes, sometimes up to 5 minutes. This may not bother you at first when you have a smaller portfolio but once you expand it will make daytrading almost impossible. (I used this brokerage for about 9 months)

NBDB (National Bank Discount Brokerage) - This is the one you want to look at, amazingly, it is the ONLY Canadian online brokerage that lets you freely, without any restrictions on Pinksheet/OTC stocks. It is one of the 'Big Five Banks' in Canada so your money is obviously safe here. However, for people who don't trade a lot the commission is a bit large at $29.99 a trade. If you have a smaller portfolio you may want to start with Questrade ($9.95/trade) and then migrate to NBDB once you expand your portfolio. Check their website to see the exact commission for inactive traders. *NBDB is having a promotion where if you bring in $15,000 you automatically qualify for the Active trader commissions, or if you open a Margain account. Active trader commissions are $6.95-$9.95(max) which is extremely competitive and very good.

Don't even worry about the other Canadian online brokerages, don't waste your time checking them as I have done so already.

I really hope this helps any Canadian traders out there and saves them the time. I had to research for quite some time to find the ones that are best with Pinksheet/OTC stocks.
you must not have heard about Interactive Brokers (my main account) then. Commissions are as low as $1.00, can be as high as $10.00 depending on the size of the trade and they allow shorting of pinks/otcs all online! You need $10,000 to deposit in order to open an account. The second best option is Questrade, which I use as well and have never had to wait the 10 minutes you are claiming to have a large trade approved, think the most I have waited it 1-3 minutes, also never had the problems I keep seeing people complain about here and there about Questrade.
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post #5 of 30
12/28/10 at 8:18pm
Questrade works fine for my needs and has great customer service. Never encountered the waiting period, but then again I dont do 1,000,000 share trades. Typically $4.95 a trade.
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post #6 of 30
12/28/10 at 8:31pm
Quote:
Originally Posted by Salival View Post
Questrade works fine for my needs and has great customer service. Never encountered the waiting period, but then again I dont do 1,000,000 share trades. Typically $4.95 a trade.
commission actually 1 cent per share minimum 4.95 and maximum 9.95
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post #7 of 30
12/28/10 at 8:38pm
Thread Starter 
Quote:
Originally Posted by theone View Post
you must not have heard about Interactive Brokers (my main account) then. Commissions are as low as $1.00, can be as high as $10.00 depending on the size of the trade and they allow shorting of pinks/otcs all online! You need $10,000 to deposit in order to open an account. The second best option is Questrade, which I use as well and have never had to wait the 10 minutes you are claiming to have a large trade approved, think the most I have waited it 1-3 minutes, also never had the problems I keep seeing people complain about here and there about Questrade.
I have personally called Interactive Brokers and confirmed twice with them, that they only allow a maximum of 500,000 shares per order.

I have used questrade for just over 9 months now, and have at times waited 14 minutes for the order to get accepted. Last month was horrible, the wait times on average were 6 minutes. This is not a debate, I'm only trying to help people. Even a 3 minute wait is too long, trades on OTC need to be instant.

Quote:
Originally Posted by Salival View Post
Questrade works fine for my needs and has great customer service. Never encountered the waiting period, but then again I dont do 1,000,000 share trades. Typically $4.95 a trade.

This thread has nothing to do with regular stocks, I'm not even sure why your posting that here? Almost every trade will be over 1million when your trading triple zero OTC stocks.
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post #8 of 30
12/28/10 at 8:52pm
Quote:
Originally Posted by Royal View Post
I have personally called Interactive Brokers and confirmed twice with them, that they only allow 500k max shares purchases per order.
just means you need to place multiple orders if you are buying millions and millions of shares. each broker has its pros and cons, it is a small price to pay to use, IMO, the best brokerage available in Canada. The 5 banks are the absolute worst to deal with. $29.99 commissions and the more you trade the less you pay??? gimme a f*** break. Even if I had over 100k to trade with, there is no way in hell I would go through any of the banks up here to place trades. The banks make people with less money to invest pay more, while someone already well off pays next to nothing in commissions. Used TD Outhouse before I knew better and was paying 29.99 PER TRADE and if I made the roughly the equivalent of two trades per day for three months straight they would lower my commissions to 9.99, if I came up short by just ONE trade then I would be back to paying 29.99. Used Scotia ITrade for a bit too, same shi*. Trading through the banks in Canada is nothing but a fee/commission scam where they set it up to make you trade more if you don't have 100k sitting in their system that they can lend out and pay you zero interest on.
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post #9 of 30
12/28/10 at 8:55pm
Quote:
Originally Posted by Royal View Post
I have personally called Interactive Brokers and confirmed twice with them, that they only allow a maximum of 500,000 shares per order.

I have used questrade for just over 9 months now, and have at times waited 14 minutes for the order to get accepted. Last month was horrible, the wait times on average were 6 minutes. This is not a debate, I'm only trying to help people. Even a 3 minute wait is too long, trades on OTC need to be instant.
I have NEVER waited 14 minutes. The only way I could see it taking that long is if you are trading an illiquid stock, you are bid squatting or waiting to sell at the ask with few buyers slapping it.
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post #10 of 30
12/28/10 at 8:57pm
Quote:
Originally Posted by Salival View Post
Questrade works fine for my needs and has great customer service. Never encountered the waiting period, but then again I dont do 1,000,000 share trades. Typically $4.95 a trade.
Questrade has the worst customer service..


First their server went down on Dec 3rd, I lost 220$ when I was forced to cover my short late.

Second I sent them funds on Dec 20, via online billing. 6 trading days later they haven't deposited those funds in my account. I missed out a very good play yesterday, VLNC, because my funds were being held.

I called questrade, they were unable to release my funds into my account, because their backoffice staff are on holidays when the market is trading.

Another issue I had, DSCO changed ticker to DSCOD, questrade has failed to update the company ticker, that means I can't sell my DSCO shares.
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post #11 of 30
12/28/10 at 8:58pm
Thread Starter 
Quote:
Originally Posted by theone View Post
just means you need to place multiple orders if you are buying millions and millions of shares. each broker has its pros and cons, it is a small price to pay to use, IMO, the best brokerage available in Canada. The 5 banks are the absolute worst to deal with. $29.99 commissions and the more you trade the less you pay??? gimme a f*** break. Even if I had over 100k to trade with, there is no way in hell I would go through any of the banks up here to place trades. The banks make people with less money to invest pay more, while someone already well off pays next to nothing in commissions. Used TD Outhouse before I knew better and was paying 29.99 PER TRADE and if I made the roughly the equivalent of two trades per day for three months straight they would lower my commissions to 9.99, if I came up short by just ONE trade then I would be back to paying 29.99. Used Scotia ITrade for a bit too, same shi*. Trading through the banks in Canada is nothing but a fee/commission scam where they set it up to make you trade more if you don't have 100k sitting in their system that they can lend out and pay you zero interest on.
Well if your an active trader on NBDB you get $6.95 commission and capped at $9.95 which is very good. I trade maybe 300+ in a month so its perfect for me.

It would be very difficult to use interactive brokers, if I'm buying a triple zero OTC stock, it may be 5-10 million i'm buying, I don't want to have to submit the order 20 times in a row to get 10m shares.

You are correct, $29.99 is a rip off which is why I recommended that new traders start with Questrade and move to NBDB once their portfolios come to full fruition.
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post #12 of 30
12/28/10 at 8:59pm
Quote:
Originally Posted by AlejandroDinero View Post
Questrade has the worst customer service..


First their server went down on Dec 3rd, I lost 220$ when I was forced to cover my short late.

Second I sent them funds on Dec 20, via online billing. 6 trading days later they haven't deposited those funds in my account. I missed out a very good play yesterday, VLNC, because my funds were being held.
wow, I have heard others complain about this as well... again, never experienced these either...
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post #13 of 30
12/28/10 at 9:05pm
Quote:
Originally Posted by Royal View Post
Well if your an active trader on NBDB you get $6.95 commission and capped at $9.95 which is very good. I trade maybe 300+ in a month so its perfect for me.

It would be very difficult to use interactive brokers, if I'm buying a triple zero OTC stock, it may be 5-10 million i'm buying, I don't want to have to submit the order 20 times in a row to get 10m shares.

You are correct, $29.99 is a rip off which is why I recommended that new traders start with Questrade and move to NBDB once their portfolios come to full fruition.
NBDB sounds the same as Scotia Itrade. The whole trade more to pay less left a really bad taste in my mouth. I make alot of trades as well but I don't have 100k cash sitting around in my trading accounts to keep my commissions low if I don't make a trade for a month or two. This whole trade more to pay less system is predatory on small/new investors and should be made illegal. When I started, I had very little to invest and quickly found myself making trades for no other reason but to retain active trader status. I do agree, if anyone is looking to start trading in Canada then Questrade is the way to go.
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post #14 of 30
12/28/10 at 9:05pm
I think Canada needs to open up its financial sector to foreign investors so that we can benefit from more favorable online borkerage services and fees.
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post #15 of 30
12/28/10 at 9:10pm
Canada has a heavily regulated and locked down banking system. There are pros and cons, but the banking collapse of 2008 didn't effect Canadian banks at all because of this.
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post #16 of 30
12/28/10 at 9:14pm
Quote:
Originally Posted by Salival View Post
Canada has a heavily regulated and locked down banking system. There are pros and cons, but the banking collapse of 2008 didn't effect Canadian banks at all because of this.
its great isn't it? our great banks seek to attract new traders with 100k or more to test the stock market with their trading skills...
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post #17 of 30
12/29/10 at 7:24am
Quote:
Originally Posted by theone View Post
its great isn't it? our great banks seek to attract new traders with 100k or more to test the stock market with their trading skills...
My friend, the stock market is not a casino, and if you have a few grand to blow, go crazy, but if you got a hundred grand plus, you better be a pro.
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post #18 of 30
12/29/10 at 8:48am
Quote:
Originally Posted by theone View Post
just means you need to place multiple orders if you are buying millions and millions of shares. each broker has its pros and cons, it is a small price to pay to use, IMO, the best brokerage available in Canada. The 5 banks are the absolute worst to deal with. $29.99 commissions and the more you trade the less you pay??? gimme a f*** break. Even if I had over 100k to trade with, there is no way in hell I would go through any of the banks up here to place trades. The banks make people with less money to invest pay more, while someone already well off pays next to nothing in commissions. Used TD Outhouse before I knew better and was paying 29.99 PER TRADE and if I made the roughly the equivalent of two trades per day for three months straight they would lower my commissions to 9.99, if I came up short by just ONE trade then I would be back to paying 29.99. Used Scotia ITrade for a bit too, same shi*. Trading through the banks in Canada is nothing but a fee/commission scam where they set it up to make you trade more if you don't have 100k sitting in their system that they can lend out and pay you zero interest on.
Td a few months ago offered 9.99 trades to anyone with over 50,000$ in accounts with them. This can include reg bank account and rrsp's.
I do believe I*trade offers the same deal. and i donot recall any restrictions on US stocks.... would have to check on that one.
I use only TD and because of the number of trades i make , i only pay 7 $per trade, and that is unlimited, with no hidden ecn fees etc , that many of the other brokers sneak in on you.
I dont bother with OTCBB and pinks but i do believe only pinks require you to phone in , and imo , most should avoid that market at any rate.
Plenty of great TSX-v pennies to play .
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post #19 of 30
12/31/10 at 2:44pm
Thread Starter 
deleted
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post #20 of 30
1/1/11 at 6:45am
can you short PUMP AND DUMP pennies with national bank?
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