02.26.09
A look into Questrade
Disclosure: I use Etrade and used to be with RBC DIrect investing
Please note that what is written here are all personal opinion and by no means reflect other people’s experience.
I started an account with Questrade to probe how to reduce trading costs for a few people I know. We all agree that Questrade’s comission sounds very cheap, but skeptical of how it remained that cheap. Business wise, it does not make sense that a broker can do trades on such low comissions while catering to small time investors like your average Joe. On top of that, Canadian’s low population does not justify the price.
All that to say, we went in skeptical with the understanding that we are most likely going to lose some money from hidden fees and mishandlings.
The trading experience
I am going to stick with the usability here and suggest some improvement. I did this in 2008 so they might have already updated it. I chose the cheapest option and traded on the web platform and the first thing that hit me is the requirement to double login. This confused me greatly, I am pretty sure that they did not perform usability testing on their trading platform.
They way they work is this. You do your maintenance through your actual account. i.e. transfer of money, conversion of money, information update etc. Once you’ve done that, you have to use this to transfer money to your trading account.
So yo wait a few day for them to cash your checks, then you wait a few more days to get your money in your account. Until finally you can trade. To trade, you have to login to your actual trading platform. I really hope that they can combine these two together, but I doubt they will do that.
Trade testing
So my strategy is simple. I don’t trust the posted rates by most of these traders. So everytime I start an account, I do a transfer of $100 to different parts to see what will happen. I then buy some shares, hold it and see what happens.
Foreign exchange cost about 1.5% of the capital. I also somehow ended up with negative capital. At first I thought I miscalculated in my foreign exchange rate so I just transferred money in and forget about it.
2 month later, I logged back in to find a negative $50 balance. I promptly called them to figure out what’s going on. The wait was terrible and the support not so great. I had read on MillionDollarJourney that you had to talk with their manager in order to get any good support.
Long story short, there was some data fees that is charged to my account monthly, add on to that is the fact that they somehow granted me margin which allows me to borrow money from them and let my account go into negative territory without a hitch. Once that happens, they charge you the normal margin rate. Which, to my recollection, was extremely high. Add to the frustration is that there’s no way to check your account history online. You have no idea what’s deducted from your account. All you can do is rely on their support, which, in my memory, reminds me of RBC Direct Investing’s personnel who mocked my loss in Nortel.
At this point, I was so infuriated that I decided to close the account and transfer all my money out. There are some additional closing fees and some other shit that they tacked on. Which ended up with them gouging a total of around $250 out of this whole trial. At that point, I didn’t care anymore. I can smell a rat and I’d rather cut my leg off than get infested. So I got out.
A month later. I reported to the group of people. I used to think that RBC Direct investing’s account transfer fee of $100 was bad, this has so far been the worst. Objectively speaking, yes, I should’ve been more careful with my money and yes, I probably didn’t read things carefully. Fact of the matter is. I am the most careful investor out of the group and I reported that I lost money so, the decision was easy. Which led to the eventual conclusion that we should STAY THE FUCK AWAY from Questrade.
Next, I will evaluate TD Waterhouse. I am still in the process of opening a simple TD checking account first so it will probably take a while. Stay tuned.
humpelpumpel said,
July 30, 2008 at 1:31 am
Related documentation is available.
Questrade’s Incompetence
causes
financial loss for investor
Late June 26 2008 I funded a Questrade account after extensively familiarizing myself with the Questrader Pro demo as well as consulting with ‘new customer service’ when questions arose.
Starting to trade on July 1.08, using the Life Questrade Pro Platform, I executed more than 100 trades as a day trader / swing trader to date.
In absence of a comprehensive Questrade manual showing rules and regulations pertaining to its policies and trading platform, calls to customer service were needed to clarify discrepancies inherent in the life versus the demo platform.
Unfortunately, I received as many contradicting information as there were agents I spoke with; requiring additional calls asking for verification from a supervisor. Andrew has to be mentioned as most professional, helpful, willing, competent and customer service oriented .
Nonetheless, reaching the “life” customer service department involved extensive waiting periods and when finally connected the respective, presumably knowledgeable ‘life account holder agent’ often needed to consult someone else to get an answer to the question; i.e. clarifying after hours trading to execute an order set off many contradicting instructions by Wes, Wen, Wendy, Ricki and Karan Mahotra whereby the latter fortunately does chose to get help instead of spouting unqualified misinformation which fails when followed.
Some of the issues are the number of decimals allowed to enter, excessively long time lapses to fill market orders despite direct access, limit orders do rarely appear on level 2 queue view, commission amounts charged are shown at 2x the amount incurred, etc.
Aside from these shortcomings, one is hopeful will iron itself out after learning Questrade’s intricacies in the most inefficient manner, Questrade’s ineptitude and lack of concern for the client does also prompt a heavy monetary loss to the user of Questrade as shown below:
On July 22.08 I closed one of several same symbol long positions which were accumulated over several days. The trading platform however, closed a position other than the one selected by me which had shown a gain when closed out at that time. Instead a significant loss occurred when the system chose a different position of the same symbol acquired at a different price than the one I had selected.
I called Questrade immediately following the incident. After 15 minutes on hold, I was informed by Ilia?, / Elia? that Questrade’s policy does not allow for account holder selection of positions to be closed out of multiple same symbol positions, but the system selects automatically the first in first out position if several positions have been accumulated over several days.
Conversely, if all of several same symbol positions are accumulated during the same day , the last position acquired is the first one out upon closing/covering one of the positions held.
I accepted that information as a lesson learned, after confirming that I had not overlooked that crucial information in Questrade’s 70 page info/disclaimer material. Instead I was advised by Ilia/Elia? that it was my responsibility to call in for obtaining such information prior to doing the trade because Questrade is a discount broker.
With this information in mind, on July 29, 2008 at 14.08 hours, I covered that day’s last acquired position held as one of several same symbol positions acquired during the morning of July 29.08. That particular position showed a gain of $148.73 .
This gain, added to a $557.23 gain closed earlier that morning in other symbols’ positions, would result in a total gain of $705.96 before commissions.
Instead, the arbitrary Questrade system selection presented me with a loss of $254.11 because the trading platform system covered a different position which was not the last position opened and thus had a different price and therefore was creating a loss. Consequently, my gain for the day to 14:09:36 hours was reduced from the earlier gained $557.23 to $303.12.
In addition, my unsuccessful attempts to resolve the issue in several phone calls to customer service resulted in repeated disconnections, more than 13 minutes waiting periods on hold and refusal by agent Ilia to connect me to a supervisor.
Instead, rude, rushed and unfriendly, he tried to convince me that only a paper, but no real loss had occurred.
He assured me he had now adjusted the account to eliminate the loss occurred. When I asked him how the result is shown so that I can see it in my trading account, he answered that he is not an IT programmer and thus, does not know how the computer did it.
I was/am unable to detect any changes made, my losses remain the same as prior to my call to Questrade and are reflected at closing of the markets.
Brad, agent at the trade desk, and later agent Karan, assured me the account would be adjusted at end of the trading day because current attempts made by them failed for technical reasons unbeknownst to them.
During my 1 and ¾ hours occupied with the phone ordeal and frustration, my other positions could not be closed out at 14:15 hours which would have resulted in a small gain; instead, an additional loss of $ 1120.57 occurred for a total loss of a minimum of $1374.68 at the end of the trading day.
Furthermore, the unresolved issue prevented me from re-acting to market performance during the remaining 1 ½ hours of trading, disabling the opportunity to re-gain some of the previous weeks’ losses.
Questade’s agents remarked they are very sorry about what happened. I requested several times to be connected to a manager or supervisor and asked for a call back, I AM STILL WAITING TO BE CONTACTED.
Related documentation is available.
Causalien said,
July 30, 2008 at 8:38 am
humpelpumpel: I did not go into as much detail of the trading system as you did but I can confirm that our experiences tells the same story. I only did it as a trial to test whether or not we can trust them. I am still writing up the report as we speak, but suffice to say that we saw some weird thing going on and lost money (This is not due to the actual stock price). We decided to pull out and claim our losses since we already have an established broker with which we trade with.
ralph said,
November 3, 2008 at 6:30 pm
I just opened an account with them and I have to say their platform, the webtrader beta
sucks. I am glad I only need a very low volume account and that I mainly trade forex with oanda.
Causalien said,
November 4, 2008 at 3:19 pm
Hey ralph,
Beware of hidden fees. That’s all I have to say. Unlike other online brokers, I couldn’t for the life of me, find a section where they document the history of all the transactions. ( I was either too dumb or too impatient to find them). In any case, I hope the same thing that happened to me won’t happen to you.
Bobb999 said,
February 23, 2009 at 8:01 pm
Bob B. 02.23.09 at 8:51 pm
Yes, Questrade sucks. I’ve had tens of $Ks in cash laying in my Questrade margin account for months, as I’ve been prudently staying away from holding much in the way of stock shares lately. Finally, I got around this week to checking on my cash and how much interest Questrade is paying me on all that idle cash. Their page says I’m getting paid “CAD rate – 2.5%” on balances up to $49,999, as long as I have a $10K minimum. But they don’t define “CAD rate”. Instead they offer a link to the Bank of Canada site’s home page, and you’re left to go searching… I never did find the “CAD rate” there. I found the Prime business rate, 3%, and thought maybe that was it. But a Questrade LivePerson chat rep. later told me no, CAD rate referred to the overnight bank rate. She said she believed it was currently 2%, which means I’m getting paid 0% interest on my cash! She confirmed that yes, I’m geting paid 0% “currently”. Outrageous enough, but what’s worse is they don’t come out and straighforwardly tell you this on their site.
In fact, someone glancing at the page might easily mistake the minus sign for a hyphen and conclude Questrade is actually paying them a generous 2.5% interest , much more than their bank savings account does – encouraging themn to keep as much cash with Questrade as possible! In reality, Questrade’s happy to hold large amounts of your cash, but refuses to pay a cent in interest on it!
I suspect Questrade is deliberately misleading people, trying to keep as many clients as possible ignorant of the fact they are getting ripped off, and receiving an unjustifiable 0% interest paid on their hard earned cash.
The rep I spoke with claimed rates change all the time, so they can’t post the specific rate! Yeah, right. They can update the value of my account balances daily, but not their interest rates? Sure.
By contrast, my other broker, Interactive Brokers, not only pays me interest on my cash ( 0.5%), but posts the figure plainly as 0.5% , as well as showing how they derive it: It’s the current LIBOR bank rate minus 0.5%. IB says the LIBOR is currently 1%. I suspect the “overnight bank rate” the Questrade rep. mentioned and LIBOR are one and the same. I also think she was guessingb (incorrectly) that that bank rate was 2%.
I’ve also come to despise Questrade and all other Canadian brokers and the TSX for the comparatively sky high commission fees charged on Canadian listed stocks, and usually on US listeds too.
When I buy US listeds via Interactive Brokers (a US Broker with a Canadian branch) , I typically pay a mere $1 US per trade! IB’s fees are higher on low priced stocks, as it’s based on the number of shares, but I can buy $10,000 US worth of a $35/share stock for $1!
I now like to daytrade, which entails multiple round-trip trades per day, and at $1 a pop commissions, daytrading US stocks via IB is very feasible. It is NOT feasible to daytrade TSX stocks though , because at $5, $10, $20 per buy or sell trade, the commissions mount up fast, and will soon wipe out any profits!
The TSX and Canadian brokers continue to gouge and insult customers by continuing charging high fees, and by paying 0% interest on your cash while obscuring this ugly fact.
Questrade is also less than candid about the extra “exchange fees” that apply
above their advertised $4.95 or $9.95. You only get the base rate if you “add liquidity”. Whenever you oplace a market order, or place a limit order but hit the current bid or ask price, you are removing liquidity, and you get penalized for doing so by being charged “exchange fees”.
Only if you place a bid lower than the current “best bid” or place an ask price higher than the current “best offer” price do you avoid these extra fees.
Again, sneaky Questrade is not very up front in their ads or on their site about this stuff. I had to go to another broker’s site to find an explanation of removing and adding liquidity. But check your trading slips, and you’ll see lots of those extra fees, unless you know about them and place your orders in such a way as to avoid them.
Online stock transactions are not much more complicated technologically than are ABM bank machine transactions. There’s no reason why commission fees need to be more than $1 per trade. Anything more is indefensible gouging of customers by greedy exchanges and brokers.
Causalien said,
February 25, 2009 at 10:29 pm
Bob999: I totally agree with you. I would’ve tried out IB if not for the fact that I didn’t qualify for them. I think they only want to attract day traders. IB does seem a bit iffy from their advertising though. But since I can’t verify, I don’t know for sure.
Ripped off said,
March 23, 2009 at 3:21 pm
Been waiting now for more than two weeks for them to return my money. It is thier refusal to return a small amount of funds that has led me to close all my accounts, 2-weeks later and still waiting.
Called thier Chief Compliance Officer, IIROC, BBB and Ombudsmen. Basically, unless they’re insolvent no one will help retrieve your funds. Despicable.