Buying & Selling Stocks in Canada

Canada has four major stock exchanges.

There are four major stock exchanges in Canada - the Toronto Stock Exchange, the Vancouver Stock Exchange, the Montreal Exchange, and the Alberta Stock Exchange. The Toronto Stock Exchange (TSX) is the largest among these exchanges, with more than 3,800 companies listed. The TSX is the world leader among stock exchanges in the mining and oil & gas sector; more mining and oil & gas companies are listed on the TSX than on any other exchange in the world.

Instructions

1. Set up an account with a brokerage house. If you reside in Canada, then your account will automatically give you access to trading at all four major Canadian exchanges. If you live in the U.S. (or elsewhere), you might have to make arrangements to trade directly on the Canadian exchanges, but at most brokers it is a simple procedure with only slightly higher brokerage fees. (Interactive Brokers allows you to trade directly on 80 exchanges worldwide.)

2. Research the stocks you are interested in buying. Both the Alberta Exchange and the TSX focus on mineral and oil & gas stocks, and the Montreal Exchange on small and medium cap business and financial service companies, while the Vancouver Exchange offers more on technology and environment-related stocks and smaller cap stocks. There are many good places to get information on stocks on the Internet today, and the research section of your broker's website is a good place to start.

3. Buy (and eventually sell) the stocks you decided on after your research. The goal of trading stocks is to "buy low" and "sell high," and many financial experts suggest establishing a stock position by dividing the total shares you are planning to buy into four to six different purchases over a few weeks or months, especially if you are investing a significant amount of money. That way, you avoid buying a lot of stock at a temporary spike in the price. Also keep in mind that you can protect your investment by placing orders to automatically sell the stock when it reaches a certain price above or below your purchase price. That way you can lock in profits and prevent big losses.

Tips & Warnings

• Investing in stocks can be risky. Do your research carefully and only invest with money you will not need in the near future.

References

• TMX: Listed Company Directory
• Million Dollar Journey: How to Buy and Sell Shares on the Stock Market
• Safe Haven: How to Buy Canadian Stocks

Resources

• Interactive Brokers