Options Trading

Recently I noted in a post that I opened up a new Interactive Brokers account in order to trade options more economically. I also shared how to move funds from your broker to IB and get started. Over the last couple of years, I have been dipping my toes and trying to understand how options trading works and trying to figure out what kind of strategy to use. Now that I have a better understanding of some of the basics, I decided to dedicate a separate to track my option trades.

Options trading can be a tricky strategy. There are multiple ways to play the field and make (also lose heavily) money. Some can be simple such as buying and selling calls and puts, some slightly more involved but still easy to understand – such as writing covered calls & puts; while some involve more complicated trades such as the bull call spread, bear put spread, butterfly spread, long straddle, long strangle etc.

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Toronto-Dominion Bank Dividend Stock Analysis 2017

TD Bank

Toronto-Dominion Bank (TD.TO)(TD) is the second largest of the Canadian banks by market cap. The company provides a diversified array of financial services operating via three segments: Canadian Retail, U.S. Retail, and Wholesale Banking. TD was founded in 1855 and is headquartered in Toronto, Canada.

A Closer Look

Toronto-Dominion Bank is the second largest of the Big Five Canadian banks. The company’s peers include Royal Bank of Canada (RY), Bank of Nova Scotia (BNS), Bank of Montreal (BMO), and Canadian Imperial Bank of Commerce (CM).

The Canadian banks are regarded as some of the safest financial institutions in the world. The companies have a long track record of being conservative and focused on long-term stability and prosperity. Most of these institutions have existed and paid dividends for more than 150 years and make for great core positions in any investor’s portfolio.

Toronto-Dominion Bank has been a hit in retail financing in Canada, US and UK. The company made a conscious decision to expand their operations in the US during the global financial crisis, as the management saw an opportunity as financial institutions stumbled/collapsed. Those moves have paid off over the years as the increased revenue from US has provided shareholders with handsome returns.

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Royal Bank of Canada Dividend Stock Analysis 2017

Royal Bank of Canada

Royal Bank of Canada (RY.TO)(RY) is the largest of the Canadian banks by market cap. The company provides a diversified array of financial services operating via five segments: Personal & Commercial Banking, Wealth Management, Insurance, Investor & Treasury Services, and Capital Markets. Royal Bank was founded in 1864 and is headquartered in Toronto, Canada.

A Closer Look

Royal Bank is the largest of the Big Five Canadian banks. The company’s peers include Toronto-Dominion Bank (TD), Bank of Nova Scotia (BNS), Bank of Montreal (BMO), and Canadian Imperial Bank of Commerce (CM).

The Canadian banks are regarded as some of the safest financial institutions in the world. The companies have a long track record of being conservative and focused on long-term stability and prosperity. Most of these institutions have existed and paid dividends for more than 150 years and make for great core positions in any investor’s portfolio.

Royal Bank has focused and regarded asset management and wealth management, especially focusing on the (ultra) high net worth individuals as their growth strategy. It is for this reason that the company spent over $5B to acquire City National Corp, its biggest takeover move targeting the wealthy Southern California residents.

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Recent Buy – Brixton Metals Corp

Another new position in my portfolio. Regular readers are aware that I have been bullish on the precious metals space since mid-2016. The new bull market started last year after a painful 4-5 years and provided investors with lucrative returns over the year. 2017 doesn’t seem to be much different — and investors are seeing almost identical performance through the start of this year as they did in 2016. My top investment pick for the year, a junior gold miner ETF (GDXJ) is up 30% YTD. You can see the live tracking of the top picks on this page.

Earlier this week I initiated a position with 5,000 shares in Brixton Metals Corp (BBB.V) @ C$0.42. Brixton Metals is a gold/silver/cobalt exploration company that operates in Canada.

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Moving from Questrade to Interactive Brokers

Recently I noted in a post that I opened up a new Interactive Brokers account in order to trade options more economically. Here in Canada, we have always lagged our US cousins when it comes to competitive pricing. The volume simply isn’t there for most financial products to be competitive. As a result, we end up paying higher fees for most products and services.

Interactive Brokers (IB) has been on my radar for a while, but when I looked at it years ago, they did not offer tax sheltered accounts such as RRSP and TFSA. That has now changed, as IB offers both types of accounts. However, the minimum amount necessary for opening an account is still the same — a slightly steep US$10,000. If you do not have $10K lying around, but have the funds in other accounts at other brokers, you can transfer them in when opening an account — this is exactly what I did.

Based on some requests from readers, here is the process to open an IB account in Canada while moving funds from another broker (I show how to move from Questrade here, but other brokers will have the same steps).

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