Is Robinhood Online Trading App Available in Canada?
By Clive Shapiro
I
April 28, 2021
Is Robinhood Online Trading App Available in Canada?
By Clive Shapiro
I
April 28, 2021
American investors are smitten with the Robinhood trading app.
Boasting a no-fee trade transaction for both buying and selling stocks, ETF’s and cryptocurrencies, they are able to dance circles around the competition.
The online trading giant has shown immense popularity with millennials, likely due in part to their “fee-less trade execution” and “no minimum balance” policies. Within this demographic, these twenty-somethings comprise 80% of all active accounts, and 90% of those active traders use their Robinhood smartphone app to complete transactions every week.
Skip the reading and go straight to the answer to find out if the Robinhood online app is available in Canada.
Otherwise, keep reading this brief description of Robinhood services and some recent news involving their platform.
|
Pro's
|
Con's
|
|---|---|
| Commision Free Trades iIndustry leader as the first brokerage to offer no fees for buying and selling stocks, ETFs, cryptocurrencies and American depositary receipt
|
Prices Not in "Real Time"
i
Your order will always be completed in real time, however, the pricing data you see on-screen is usually slighlty delayed, despite being advertised as such. Delays can vary up to as much as 15 min. As such, this app is not recommended for serious day traders |
| No Minimum Account Balances iHaving no balance requirments opens up trading to those who are budget-minded as well as young or tenderfooted investors
|
Somewhat Unreliable Service
i
There were three outages in 2020 and twenty-one outages in 2019 where the app services were unavailable |
| Smartphone and Tablet Access iEasy to navigate and stripped down for a simplistic approach. Gives traders a somewhat "gamer" feel to buying and selling
|
Only Available to US Citizens iEven though eligible account holders can access the app (including trading capabilities) while travelling, non US citizens or permanent residensts cannot set up a new account |
| Great for Inexperienced Investors iGives those interested in entry-level trading a chance to familiarise themsleves to market conditions with minimal commitemet or risk |
Poor Customer Service iSome clients have waited weeks for answers and there's no way to contact a customer representative by telephone as of yet |
|
Pro's
|
Con's
|
|---|---|
| Commision Free Trades iIndustry leader as the first brokerage to offer no fees for buying and selling stocks, ETFs, cryptocurrencies and American depositary receipt
|
Prices Not in "Real Time" iYour order will always be completed in real time, however, the pricing data you see on-screen is usually slighlty delayed, despite being advertised as such. Delays can vary up to as much as 15 min. As such, this app is not recommended for serious day traders or high-frequency traders |
| No Minimum Account Balances iHaving no balance requirments opens up trading to those who are budget-minded as well as young or tenderfooted investors
|
Somewhat Unrelaible Service iThere were three outages in 2020 and twenty-one outages in 2019 where the app services were unavailable |
| App for Smartphone and Tablet iEasy to navigate and stripped down for a simplistic approach. Gives traders a somewhat "gamer" feel to buying and selling |
Only Available to US Citizens iEven though eligible account holders can access the app (including trading capabilities) while travelling, non US citizens or permanent residensts cannot set up a new account |
| Great for Inexperienced Investors iGives those interested in entry-level trading a chance to familiarise themsleves to market conditions with minimal commitemet or risk |
Reportedly Poor Customer Service iSome clients have waited weeks for answers and there's no way to contact a customer representative by telephone as of yet |
So Why Aren’t Any of Us Snowbirds North of the Border Jumping on the Bandwagon?
You would expect us to be lining up in droves trying to get in on a little of the action. But there are a few issues; most of them revolving around Canadian market regulations, specifically those which restrict brokerages from using market makers to fulfill customer orders.
Such restrictions allow for greater transparency which is necessary for safeguarding against short-term market instability. When you have every Moe, Larry and Curly dipping their snout in the trough there’s a good chance you’ll create some very unnecessary systemic ripples.
One only needs to peer back a few months into late Jan when a frenzy of GameStop stock options were being gobbled up by your everyday Joe’s, inflating the price beyond value and triggering the market’s risk reduction clearinghouses to step in and stop the bleeding. It was an absurd mess of financial slapstick, a masterpiece of seemingly random events led by chaos and misguided human nature, fused together, creating a scenario the likes of nothing Hollywood could ever touch or reproduce.
In the US, where brokers are not restricted to outsource their clients’ fill requests, you’ll find silicon valley start-up companies like Robinhood taking advantage, by allowing their platform to complete zero-fee transactions through wholesale means, such as through the services of market makers. This allows greater volume with much faster execution on trades.
Since Canadian brokerages aren’t permitted to receive payment for their clients’ order flow, and Robinhood relies on this to propel their business model, they are denied entry at the border. No free lunch today, unfortunately.
So I Can't Sign Up for a Robinhood Account in Canada?
Unfortunately, short of you being a US citizen or resident, with a Social Security Number and have a trading account in US currency, then no, trading on the Robinhood platform while in Canada won’t currently be an option for you.
It had been an ongoing question for quite some time – many of us north of the border wanted to know – when is Robinhood coming to Canada?
There had been speculation for a while, on its arrival, especially with Robinhood’s initial plans to set up shop in the UK last year. Then came the announcement in July 2020 that they will be putting an indefinite halt to their expansion across the pond.
According to one of Robinhood's senior executives, the decision to postpone plans for a British launch was a difficult one, though it had nothing to do with any concerns from UK officials.
After an arduous year surrounding the safety concerns amidst the Covid-19 worldwide pandemic and the unfortunate event surrounding the suicide of 20-year-old Robinhood investor Alexander Kearns, the decision to strengthen their core business and products nationwide took precedence over all other corporate ventures.
That, coupled with the Canadian market regulatory laws against brokers using wholesale means to complete fill orders, pretty much sinks that last mail in the coffin.
For the time being, Canadians will have to wait until the dust settles, (which could be a very long time, so if I were you, I wouldn’t hold my breath). In the meantime, you’ll have to choose from one of the alternatives – and those, are quite honestly not looking so bad at the moment.
Are There Any Comparable Online Brokerages Here in Canada?
Initially, Robinhood was the first to offer no-fee buying and selling in an era where $10 to $20 trades were the norm and dinosaurs ruled the earth. Brokers from near and far witnessed the popularity of this new mechanism and in the hopes of survival recognized the need to adapt.
So they did.
In 2019, 3 major US brokerages; TD Ameritrade, Charles Schwab and E-Trade joined the ranks of commission-free trades for individual stocks and ETF’s.
Then more jumped on the bandwagon and some new players emerged from the ash.
Some analysts say that Robinhood still leads the pack, however, their original business model will have to adapt and offer a broader range of services if they want to continue in their trailblazing ways.
The cutting-edge ideas they once offered aren't as unique to the prince of thieves as much as they were almost 8 years ago.
In fact, other online trading brokerages (other than the major players) offer similar if not the same lucrative ways to play in the sandbox as Robinhood.
Some of these firms match the no-fee options while others provide competitively low commissions on eligible transactions. Interestingly enough, many provide a few needed upgrades, discouragingly not implemented by the coveted pioneering conglomerate in green and white.
If I Can’t Use Robinhood Then What Are My Other Options?
Since Robinhood’s online trading app isn’t currently available in Canada, you might consider one of our two top-rated choices with a very similar interface.
Both of these alternatives offer a homogeneous interface, very much the same as the ‘gone-viral” app south of the border.
Can you day trade on Wealthsimple or Questrade? Yes!
Or if you are interested in a more automated approach (which can be anywhere from a conservative gameplan to an aggressive one), then consider using a robo-advisor platform such as Wealthsimple Invest or Questwealth Portfolio.
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