Exchanges

You don't need to memorize all of this. Use it when something doesn't make sense.

All four of these brokers are legit. They handle stocks. Most handle options. All four are free to open; Wealthsimple and Webull are $0 on stock trades, while Moomoo and IBKR charge small per-share fees. The differences come down to interface, fees on active trading, and what country you're in.

1.1The Four Brokers

The Wealthsimple and Moomoo buttons marked "(my link)" are my referral links — I may earn a bonus.

1.2Which One Should You Pick?

Wealthsimple. The best options platform in Canada — clean UX, simple order entry, no commissions. The catch is FX fees on USD options (covered in 1.5). Worth dealing with for the simplicity.

IBKR. The best platform for stock execution — lowest commissions on volume, deepest market access, used by professionals worldwide. Approval is usually 1–2 business days once your ID is in, but budget real time for the long application and expect a massive learning curve. Not ideal for options.

Webull is the better pick between the two casual platforms. Cleaner mobile, smoother UI, fewer rough edges. Moomoo works fine as a backup but Webull does most things slightly better. Either way, pick whichever has the better sign-up bonus when you're ready.

Start with Wealthsimple if you're Canadian. The interface won't overwhelm you and the options support is enough to grow into.

Stay where you are. Switching brokers is a hassle and they all execute trades. The platform doesn't make you profitable. The trades do.

1.3You Can Use More Than One

Most active traders run two brokers. One for the bulk of long-term holdings, one for active trading. Mine: a Wealthsimple TFSA for long-term money and an IBKR account for active trading (Chapter 4). Wealthsimple is also the cheapest place for options — $0 per contract on stock and ETF options — so options can run there. Use a USD account so FX fees don't eat the saving (1.5), and keep active options trading out of the TFSA (Chapter 3).

The reason: registered accounts (TFSA, RRSP) work best at one platform you trust. Active trading needs different tools — charting, fast execution, level 2 data. Splitting them lets each broker do what it does best.

1.4Never Use Your Bank for Trading

Most Canadian banks charge $5–$10 per trade. Some bank platforms still charge $9.95 per stock trade as of 2025. Compare that to $0 at Wealthsimple and Webull, or about $1.50–$2 minimum a trade at Moomoo.

Real-world math: if you make 30 trades in a month, that's $300 in fees at $10/trade. Over a year, $3,600 in commissions just to participate. On a $50k account, that's a 7% drag on returns before you've made a single dollar.

Banks aren't trying to attract active traders. They want long-term holders buying mutual funds. Their trading platforms are an afterthought built to upsell you into advisor services. Everything is intentionally slower, more expensive, and less feature-rich than the dedicated brokers above.

• Commissions — $5-$10 per trade adds up fast
• Options support — most banks charge $1-$1.50 per options contract on top of base commissions
• Order types — you get market, limit and stop-limit (TD even has trailing stops), but advanced bracket orders are thin or missing
• Execution speed — bank platforms route slower than dedicated brokers
• Data quality — delayed quotes on free tiers, paid Level 2 add-ons
• UI — clunky, slow, mobile experience often broken
• Reporting — basic statements only. No tax-optimized reports, no realized gain/loss summaries that actually help

If you only buy and hold a couple of ETFs once per year and never trade individual stocks, a bank account is fine. The fees are negligible at that frequency. But if you're reading a Nefarious education artifact, that's probably not you.

For anyone trading actively — switch to a dedicated broker. Wealthsimple is the easiest move for Canadians: its trading accounts are CIPF-covered and its chequing account is CDIC-insured through partner banks. Moomoo and IBKR for serious trading. Bank trading platforms cost you thousands per year for nothing in return.

1.5 Wealthsimple's FX Fee Problem (And the Workaround) ▼

Wealthsimple is the best Canadian options platform. But it has one specific catch you need to know about: every USD trade includes an FX conversion fee of around 1.5%. Most options worth trading are on US underlyings (NVDA, TSLA, SPY, etc.) — which means almost every options trade you make on Wealthsimple eats this fee.

The Math

You buy a $500 USD options contract from a CAD account. The ~1.5% FX fee is about $7.50 USD on the buy alone (roughly $10 CAD at an illustrative 1.35 rate). Sell the contract for $700 USD? Another ~$10.50 USD to convert back. About $18 USD round-trip on a $500 trade — roughly 3.5% in fees before P&L.

Over 30 options trades a year, that's $500+ USD in FX bleed.

The Workaround — Norbert's Gambit

Norbert's Gambit is a method to convert CAD to USD for a flat fee instead of a percentage. Here's how it works:

1. Buy DLR.TO (a CAD-denominated USD currency ETF) on the Toronto Stock Exchange
2. Journal those shares yourself to DLR.U.TO (the USD-denominated version of the same ETF) — you do this in the Wealthsimple website, no need to call or message support. Wealthsimple charges $9.95 + tax per journal.
3. Sell DLR.U.TO (it trades on the TSX in US dollars) — now you have USD without the 1.5% FX fee

You can do the whole thing yourself — it's all on the website (not the app). The journal takes about 2 business days, then you sell the USD (or CAD) side.

Same ETF, just denominated in two currencies. On a $10,000 conversion, the 1.5% fee would be $150 — Norbert's costs about $11 with tax. Below roughly $1,000 it's not worth the effort.

The Catch

To benefit from Norbert's Gambit, you need a place to hold the USD after converting. On Wealthsimple, that means a USD account. Two ways to get one:

• Pay $10/month for the USD account add-on
• Hold $100,000+ in assets on Wealthsimple — Premium tier includes USD account free

Once you have a USD account, Wealthsimple's own CAD→USD transfer fee also drops with size: 1.5% under $10,000, 1% to $25,000, 0.5% to $100,000, and 0% above that. Compare before you journal.

When It's Worth It

• Active options trader on Wealthsimple: the $10/month USD account pays for itself in saved FX fees within a few trades
• Premium tier ($100k+ assets): USD account is free — use Norbert's Gambit when you fund USD trades in chunks of ~$1,000+
• Casual trader doing 1-2 trades a month: probably not worth the hassle — just pay the FX fee

The Math With Workaround

Same $500 USD options contract. You pre-converted $1,000 CAD to about $730 USD via Norbert's Gambit (illustrative 1.35 rate, after the ~$11 journal fee). Buy the contract. Sell for $700 USD and keep it in USD. No FX fee on the trade — versus ~$18 USD round-trip the standard way, every trade.

Practical Move If you're going to trade options on Wealthsimple seriously, plan for the USD account from day one. The $10/month or upgrade to Premium pays for itself.

1.6What is Spread? (And Why IBKR Wins)

The spread is the gap between the highest price a buyer is willing to pay (the bid) and the lowest price a seller is asking (the ask). Every trade you make crosses this gap — and every broker handles it differently.

Say a stock has a bid of $50.00 and an ask of $50.05. The spread is $0.05. If you buy at $50.05 and immediately sell, you'd sell at $50.00. You lost $0.05 per share — the spread — before the stock moved at all.

On 100 shares, that's $5. On 1,000 shares, $50. On 10 trades a day, the spread adds up to real money. Wider spreads = more friction = lower returns.

Two things drive what spread you actually pay:

• Order routing — where the broker sends your order. Better routing = better fills inside the spread
• Market maker relationships — pro brokers have direct access to wholesalers and dark pools that retail brokers don't

IBKR routes through SmartRouting — an algorithm that scans every exchange and dark pool simultaneously to find the best execution price. You frequently get filled inside the displayed bid/ask spread, not at it.

• Retail brokers (Wealthsimple, Moomoo, Webull) often route through one or two venues. You get the displayed bid/ask.
• IBKR routes intelligently across 100+ venues. You frequently save a few cents per share.
• Compounded over a year on an active account, the spread savings alone can pay for IBKR's commissions many times over.

This is why IBKR is the pro standard. The commission discount on volume gets the attention. The spread advantage is the real edge.

1.7The Real Cost of "$0 Commissions"

"$0 commission" does not mean free. The broker still makes money — just somewhere you don't see on the trade ticket. Watch for all of these:

• The spread — the bid/ask gap (above). A wider spread is a hidden cost on every fill.
• PFOF (payment for order flow) — US free-trade apps (Robinhood, Webull and Moomoo's US apps) get paid by market makers for your orders, which can mean a slightly worse fill. Canada bans PFOF on Canadian-listed stocks, but not on US-listed ones.
• FX fees — about 1.5% to convert CAD↔USD on Wealthsimple. This is the big one for Canadians trading US names — cut it with Norbert's Gambit (1.5).
• Options per-contract fees — many brokers charge a fee per options contract (IBKR; Moomoo US$0.65; Webull Canada US$0.99 for new accounts after a 3-month intro). Wealthsimple is $0 on stock and ETF options but charges on index options (US$0.25–$1 a contract) and US$45 to exercise early. That's the lowest per-contract cost of the four — which is why options can run there instead of at IBKR, where every contract costs you. Trade them from a USD account (1.5) so the FX fee doesn't eat the saving.
• Data fees — real-time Level 2 data is often a paid monthly add-on.
• Account / inactivity fees — e.g. Wealthsimple's USD account ($10/mo without Premium).

The cheapest-looking broker isn't always the cheapest. Real cost = commissions + spread + FX + data fees.

A few dollars per trade feels harmless. Over years it quietly eats a huge chunk of your account — and the smaller your portfolio, the more it hurts, because every dollar is supposed to be compounding for you, not the bank.

• Per-trade commissions. A big bank charges ~$9.95 a trade. Two trades a week is ~$1,000 a year — about $10,000 over 10 years, on top of the spread. On a $5,000 account that's brutal, and a $9.95 commission on a $100 trade is a ~10% loss before the trade even moves.
• Fee drag (MER). A typical bank mutual fund charges ~2% a year; an index ETF charges ~0.06%. On $10,000 growing 7%/year, that 2% costs you about $3,400 over 10 years versus paying no fee (about $3,300 versus the 0.06% ETF) — and the gap widens fast with more money and more time.

1.8Fee Comparison at a Glance

Promotions and exact fees change often — confirm the current numbers on each broker's site before you commit.

1.9Options Approval Levels

You can't just start buying options — brokers gate them behind approval levels you apply for when you open (or upgrade) the account. They're roughly:

• Level 1 — covered calls, cash-secured puts (lowest risk).
• Level 2 — buying long calls and puts. This is what you need to follow most alerts.
• Level 3 — debit / credit spreads.
• Level 4 — naked / uncovered options (highest risk, rarely approved for retail).

To follow Nefarious options alerts you typically need Level 2. The application asks about your experience, income, and risk tolerance — answer accurately. List the experience you really have, and never inflate it to unlock a higher level: the tiers exist to match you to risk you can handle. Denied or capped low? Reapply once you've got more screen time. (Level names vary slightly by broker.)

1.10Is Your Money Safe? (CIPF)

In Canada, regulated brokers are members of the CIPF (Canadian Investor Protection Fund). If your broker goes insolvent, CIPF returns your property within limits:

• Up to $1 million combined for general accounts (TFSA, FHSA, non-registered, margin).
• Plus up to $1 million combined for registered retirement accounts (RRSP / RRIF).
• Plus up to $1 million for RESPs.

Two things it does not do: it doesn't cover crypto assets, and it doesn't protect you from market losses — if your stock drops, that's on you. CIPF only makes you whole if the firm fails, valued at the insolvency date. (CIPF isn't CDIC: CDIC insures bank deposits like chequing and GICs; CIPF covers what a failed investment dealer holds for you.) This is exactly why a regulated broker beats leaving cash on an unregulated crypto exchange. (US equivalent: SIPC, up to $500k.) Always confirm your broker is a CIPF member.

1.11Funding, Withdrawals & Switching Brokers

Funding: most Canadian brokers take Interac e-Transfer (fast, smaller limits) or bank EFT/wire (larger, 1–3 days). Withdrawals go back to your linked bank — give it a few days.

Switching brokers (in-kind transfer): you can move your holdings from one broker to another without selling — an "in-kind" transfer. Your old broker usually charges a transfer-out fee (~$135–150), but the receiving broker often reimburses it:

• Wealthsimple — up to $150 per account on transfers of $25,000+ (usually automatic; if it doesn't show up, send support the fee statement from your old broker).
• Moomoo — about $100 for transfers of $10,000+.
• Webull — up to $150 per account (min $2,000; up to two reimbursements).
• IBKR — doesn't reimburse, but it charges no transfer-out fee either, so there's nothing lost leaving it.

Never feel stuck at your first broker. An in-kind transfer keeps your positions intact, and the reimbursement usually covers the exit fee. (Reimbursement promos change — verify the current offer.)

Spot crypto exchanges (Coinbase, Kraken) let you buy and hold actual coins. Perp exchanges let you trade leveraged contracts — bigger size, no expiration, but with funding fees and liquidation risk. Most serious crypto traders use perps for short-term moves and hold spot for long-term positions.

2.1The Main Perp Exchanges

For spot I use Coinbase. It's CSA-registered in Canada (so is Kraken), which is exactly why it's spot only for regular Canadian investors: no leverage, no perps. Binance and Bybit are two of the biggest centralized perp venues in the world, but both left Canada in 2023 and neither serves the US. I don't recommend them.

2.2What to Look For in a Perp Exchange

• Liquidity — deeper books = less slippage on bigger orders
• Funding rates — the fee you pay (or receive) for holding positions: usually every 8 hours on big exchanges, every 1–4 hours on some pairs and venues (Hyperliquid: hourly)
• Fee tiers — most exchanges drop fees as your volume grows
• Order types — TWAP, scaled orders, post-only — the more options, the better
• Withdrawal reliability — can you actually get your money out?
• Jurisdiction — many exchanges bar US and Canadian (or Ontario) residents in their terms, not just by IP. If you're barred, don't use it.

2.3Spot vs Perp — When to Use Each

• Spot: long-term holds, no leverage, you own the actual coins
• Perp: short-term trades, leverage available, just contracts

Most active crypto trading happens on perps. Most long-term storage happens off-exchange entirely.

If you're trading in Canada, you have options most countries don't. The wrong account can cost you 25-50% of your gains. The right one is tax-free for life. Most beginners use the wrong one because nobody told them otherwise.

3.1TFSA — Tax-Free Savings Account

The most powerful account for retail traders. Every dollar you make inside a TFSA is tax-free, forever.

• 2026 annual contribution limit: $7,000 (third year at this amount)
• Total room if you've been 18+ since 2009: $109,000 (through 2026)
• No tax on capital gains, dividends, or interest — ever
• Can withdraw anytime — but withdrawn room only restores the next year
• Over-contribute and the CRA charges 1% per month on the excess until you take it out

The most common myth: "you can't trade in a TFSA." That's wrong. You absolutely can trade in a TFSA — buying and selling stocks, ETFs, and options is exactly what it's designed for. The gains are tax-free.

What the CRA actually cares about is whether you're operating it like a business instead of an investment account.

Two things draw CRA attention to a TFSA:

• High trading frequency — lots of trades, day after day, signals day trader rather than investor. Holding positions for minutes or hours instead of days/weeks is the pattern they look for. There's no official "safe" number of trades: the CRA weighs the whole picture — how often you trade, how long you hold, your knowledge and experience, and how much time you put into it.
• Outsized returns over time — this is the biggest one. If your TFSA grows from $50k to $500k in a couple of years, that growth is hard to explain as passive investing. The CRA reads it as professional trading income.

The CRA will treat your TFSA gains as business income — taxed inside the TFSA at the top marginal rate (no lower brackets; roughly 48–55% combined, depending on province), not tax-free — and you're jointly liable for the bill. They can also reassess past years and charge back-taxes plus interest. There have been real cases where Canadians got hit with six-figure tax bills after the CRA flagged their TFSA activity.

• Hold most positions days to weeks minimum — not minutes or hours
• Keep day trading and scalping out of the TFSA entirely — that's what the non-registered account is for
• Don't try to maximize returns through pure high-frequency activity — let positions compound over time
• If a swing trade becomes a great winner, fine — it's the pattern of behavior they look at, not single trades

3.2RRSP — Registered Retirement Savings Plan

Tax-deferred, not tax-free. You get a tax deduction when you contribute, then pay full income tax when you withdraw in retirement.

• Annual contribution: 18% of last year's income (capped)
• Best if you'll be in a lower tax bracket in retirement
• Withdrawals before retirement are taxed heavily
• Better for long-term holds than active trading

3.3Non-Registered (Taxable Account)

The regular trading account. No contribution limits. Gains are taxed.

• Capital gains: only 50% of profit is taxable (if held as investment)
• Business income: 100% taxable at your marginal rate (if CRA rules you a trader)
• Losses can offset gains
• No restrictions on trading frequency

3.4The Trader Classification Risk

The CRA can classify your trading as either:

• Investment income — 50% taxable at capital gains rate (good)
• Business income — 100% taxable at full rate (bad)

Factors that lean toward "business income":

• Very frequent trading (day trading, scalping)
• Short holding periods
• Trading is your main income
• You use leverage heavily
• You have a structured approach (trading plans, journals — yes, this can be used against you)

3.5Strategy by Account

Long-term holds, swing trades, anything you want to keep tax-free. Don't day trade here — CRA reclassification risk.

US dividend-paying stocks (no US withholding tax on US-listed stocks and ETFs in an RRSP), long-term ETFs, retirement-focused holdings.

Active trading, options trading, anything where CRA reclassification would be expensive in a TFSA.

If you're saving for a first home — the best of both: contributions are tax-deductible like an RRSP, and a qualifying first-home withdrawal is tax-free like a TFSA. Limit: $8,000 a year, $40,000 lifetime (up to $8,000 of unused room carries forward).

This isn't a recommendation. It's a reference for how a working trader actually splits his accounts. Your setup should match your own situation — country, account size, what you trade.