Every Canadian should know how to buy stocks in Canada. Why? Historically, investing in the stock market has been one of the most powerful ways to build long-term wealth. In Canada, we have a robust, well-regulated and highly liquid stock market where investors can buy stocks quickly and easily. If you've thought about entering the stock market recently, read on to learn how you can get started and accelerate your journey toward your financial goals!

How to buy stocks in Canada: 5 easy steps

To buy stocks of companies in Canada by yourself, you have to open a brokerage account with a registered broker. The alternative is to go through a licensed stockbroker or financial advisor who can buy the shares on your behalf. Once you have an account open, follow these steps to start trading stocks!

1. Learn about the major stock exchanges in Canada

In Canada, stocks of public companies are primarily traded on four exchanges:

  • Toronto Stock Exchange (TSX)
  • TSX Venture Exchange (TSXV)
  • Canadian Securities Exchange (CSE)
  • NEO Exchange

Out of these exchanges, the TSX is the largest one in Canada and the third-largest in North America. Shares of Canada’s largest and most well-known corporations are traded on the TSX.

A distinct feature of the TSX is that it has more oil & gas stocks than any exchange in the world. The TSX Venture Exchange and the Canadian Securities Exchange focus more on small-cap stocks, which are issued by companies that are generally at an earlier stage of growth.

Lastly, the NEO Stock Exchange is the newest major exchange in Canada. Founded in 2015, NEO was established as an alternative to the larger exchanges with a vision to prevent predatory practices such as High-Frequency Trading (HFT).

2. Do your research

Investing can be a risky business if not done right. Before you start, you should do your research on the stocks worth buying. There are two main approaches to researching a stock: (i) fundamental, and (ii) technical.

Fundamental analysis involves deep-dive research into a company’s strategy, operations and financial ratios to determine undervalued stocks. On the other hand, technical analysis involves reading stock charts to identify patterns or trends that could point to a stock’s price rising or falling in the short- to mid-term. The best investors will use a combination of the two techniques to select stocks for their portfolio.

How to evaluate a stock

As an investor just starting out, here are the key things to look for when evaluating a stock:

Financial performance

How does the company’s financial performance stack up to competitors? It is worth looking at their historical growth percentages, gross and net margins, cash flow generation, etc.


Does the company have a viable strategy and a qualified team to execute upon it?

Competitive advantage

Does the business have a proprietary technology or patent on its products? Is it in an industry with high barriers to entry? Does it have a competitive advantage that is sustainable and sufficiently non-replicable? These are all questions that need to be answered before purchasing a stock.

Price to earnings ratio

The Price to Earnings ratio (P/E ratio for short) is measured by dividing the company’s stock price by its Earnings per Share. All else equal, a higher P/E ratio for one company over another means that the former is overvalued compared to the latter.

Dividend yield

Calculated by putting dividend per share in the numerator and the share price in the denominator, the dividend yield is expressed as a percentage. The higher the dividend yield, the better the stock’s reputation as a ‘dividend stock’. If earning regular income from your stocks is a priority for you as an investor, then dividend yield is a key metric that should be considered.

3. Learn the terminologies of stock trading

Once you have a good understanding of the types of companies you are interested in, you can start reviewing their charts to understand their price movement history and determine at what price point you want to enter and exit. Some of the key items to look out for when reading a chart include:


This is a 3- or 4-letter symbol that references the name of the underlying stock you are buying. For example, Apple, Inc.’s ticker is AAPL.

Open, close and current prices

The open price is the price that the stock was trading at during the start of the trading day. The close price is the stock price as of the last completed trading day. Current price refers to the price that you can buy or sell the stock for at the present time.


The volume is the number of shares that have exchanged hands within a single trading period. A higher volume means that the stock is traded quite frequently and may have strong buying and/or selling interest.

52-week high/low

The 52-week high and low prices are the maximum and minimum price that the stock has traded at over the last 52 completed calendar weeks.

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Bid/ask spread

The bid price is the maximum price that buyers are willing to pay for a stock, and the ask is the lowest price that the sellers of the stock are willing to accept. The difference between the two prices is called the bid-ask spread. Usually, stocks with higher volumes will have a low spread which means that it is easier to buy and sell these stocks.

4. Select your order type

When trading stocks in Canada, there are three main types of orders you can place with your brokerage account.

Market orders

With market orders, your buy or sell orders are fulfilled at the prevailing market price at the time. This price may fluctuate up or down from the time you execute the order, so market orders are best used only when the stock price is not volatile.

Limit orders

A limit order sets the maximum price you are willing to pay for a particular stock. Unlike the market order, a limit order only executes when the price is below the threshold set by the buyer. If the price does not drop to or below the threshold past a certain time period, the order automatically expires.

Stop-loss orders

A stop-loss order instructs the broker to sell a stock when it reaches a floor price. For example, if a buyer bought a stock for $100 and wants to ensure they do not lose more than 10% on their investment, they can set a stop-loss at $90 and the broker will automatically execute the sell trade if the stock hits $90.

5. Buy the stock!

Once you have identified the stocks you want to buy and noticed a good entry price, it is time to pull the trigger and buy your stock through an online brokerage! The last step is figuring out how much you want to buy.

It is generally considered best practice to not invest more than 10% of your capital into a single security. This helps you protect your downside in the event that the one stock encounters difficulties that cause its price to drop.

You should also decide which account you want to use to trade with. The benefits of RRSPs and TFSAs are presented below. You should ideally seek to maximize both your RRSP and TFSA each year before you buy stocks in your personal account.

6. Monitor and manage your stocks

As a bonus step, you should periodically monitor your account to ensure that you are tracking toward your investment objectives. If you find that your stocks are down while the market is up, it might be worth revisiting your selections to pick less risky stocks. On the other hand, if you find that you are not making progress as quickly as you hoped, then you may want to select more growth-oriented stocks.

Remember though that patience is key in the markets. As the legendary Charlie Munger said, “Big money does not come from the buying and selling of stocks. It comes from the waiting.”

Types of investment accounts you can use to buy stocks

When you buy stocks, you have the option of purchasing the stock through either a registered or a non-registered personal account. Registered accounts are those that have specific tax advantages as stipulated by the government. These advantages could include the ability to defer tax, as in the case of an RRSP, or shelter your income from taxation, as in the case of a TFSA.

Buying stocks in an RRSP

A Registered Retirement Savings Plan (RRSP) is a type of tax-advantaged investment account. Each year, the government will set the maximum amount that an individual can contribute to their RRSP. This amount is contingent on the individual’s income in the previous year.

Some of the key advantages of RRSPs include:

  • In the year that RRSP contributions are made, the individual’s taxable income is reduced by the amount of the contribution.
  • Any growth within an RRSP is tax-deferred which means that taxes are only paid when an amount is withdrawn from the RRSP.
  • Withdrawals can be made at any time. While taxes will come into effect when a withdrawal is made, this is a benefit for individuals such as early retirees in Canada. In the US, the comparable 401k does not offer this benefit.
  • Programs such as the First Time Home Buyers’ Plan (HBP) and Life Long Learning Program (LLP) allow you to access the funds in your RRSP on a tax-free basis to fund the purchase of your primary residence or higher education.

There are also some drawbacks to consider:

  • Once a withdrawal is made, the contribution room is lost and cannot be regained in the following year.
  • Your contribution room is based on the gross income you earned and reported in the previous year.
  • At the age of 72, it is mandatory to convert your RRSP into a Registered Retirement Income Fund (RRIF) which has prescribed rates of withdrawal that have to be made regardless of whether you need the income or not.

Buying stocks in a TFSA

A Tax-Free Savings Account (TFSA) is a type of investment account that allows you to purchase assets and let them grow tax-free in the account. Each year, the government sets a maximum amount that can be invested into a TFSA, regardless of income. For 2023, that number for Canadians is $6,500.

Some of the key advantages of TFSAs include:

  • Investments within the TFSA can compound on a tax-free basis. You do not pay any tax on the capital gains, dividends or other income received while the assets were held in the TFSA.
  • You can withdraw from your TFSA at any time without incurring taxes.
  • When you make a withdrawal from your TFSA, the contribution room is re-added to your maximum TFSA amount in the next year.
  • Unlike the RRSP, there is no forced withdrawal with the TFSA.

Despite the myriad benefits, there are two major considerations with a TFSA:

  • With the RRSP, you can reduce your taxable income each year. The same benefit does not exist with a TFSA.
  • Your TFSA is not protected from creditors in the event of a bankruptcy or lawsuit.

Best online brokerages to buy stocks in Canada

In Canada, prospective investors have a host of choices when it comes to selecting an online brokerage. It is important to choose the right brokerage that fits your needs.

A platform that works for one person doesn’t necessarily have to be the best choice for another if their investment styles and objectives are different. When selecting a brokerage, it is important to evaluate a few things:

The type of assets that can be traded on the platform

Different platforms offer access to different asset classes like stocks, bonds, ETFs, mutual funds, derivatives, etc. Start by shortlisting the platforms that offer what you would like to trade.


Certain platforms offer commission-free trading while others charge a fee either per share or per trade. While attractive, commission-free platforms may not offer other capabilities such as research tools or a wide selection of asset classes, so it is important to evaluate the value you receive and not just the headline pricing.

Account fees

Some platforms charge an annual or quarterly fee to use their platform. However, it is once again important to check these fees to assess the value you receive in return and whether you are eligible for a fee waiver.

The 4 most popular brokerages in Canada

Canada offers a variety of investment brokerages that provide excellent services and user-friendly platforms. Here are four of the most popular brokerages in Canada, each with its own distinct benefits.

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Wealthsimple Trade is Canada’s first commission-free platform that gives investors access to long-only equity opportunities across the US and Canada, which means you can only bet on the security price rising instead of falling. The latter is called ‘short-selling’. The assets you can trade on Wealthsimple Trade include stocks (including fractional shares), ETFs, and cryptocurrencies.

Wealthsimple Trade offers multiple advantages including:

  1. Zero commission trades. The only fees paid are a 1.5% currency conversion fee when there is a difference in foreign exchange.
  2. Clean, user-friendly mobile app that can be used by anyone from beginner to expert investors

The main consideration when using Wealthsimple is that the platform does not offer sophisticated capabilities such as short-selling or options trading. As a result, the app is primarily targeted towards beginner to intermediate investors or investors who are not seeking such advanced features in their financial journeys.

Wealthsimple’s free version offers commissioned trading, but has a limited set of features. Wealthsimple Plus is a $10 per month package that offers no FX fees on trades, instant deposits of up to $5,000 and USD accounts.

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National Bank Direct Brokerage is the first Canadian bank to offer brokerage services with zero commissions. The assets you can trade on NBDB include stocks, bonds, mutual funds, ETFs, and options.

Advantages of using NBDB include:

  1. Zero commission trades made in Canadian and US markets
  2. Access to free tools for stronger decision-making

Because the platform is relatively new, its mobile app capabilities are still evolving compared to the others which are more established and intuitive.

From a pricing standpoint, NBDB offers commission-free trading. However, there is an annual account fee of $100. This fee can be waived if: (i) your assets total $20,000 or more, (ii) you have an InvestCube account, (iii) you are 30 years of age or younger as of May each year, (iv) you’re enrolled in one of the bank’s programs for young professionals.


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Qtrade is an online platform that offers added research and monitoring tools and resources for investors to use to make sound decisions. The assets you can trade on Qtrade include stocks, bonds, ETFs, mutual funds and options.

Advantages of using Qtrade include:

  1. Strong reputation for good customer service.
  2. Research tools have been reported to be a strong value-add for investment decisions.

The primary consideration to make when using Qtrade is that the platform has a relatively higher cost to use than Wealthsimple Trade. While Qtrade offers commission-free trading on select ETFs similar to Wealthsimple, it charges $6.95 to $8.75 per trade on stocks, mutual funds, options and other ETFs outside the free selection. There is also a $25 fee charged quarterly which can be waived if the account balance exceeds $25,000.


Questrade is a good hybrid option between a commission-free broker and a low-cost discount broker. The assets you can trade on Questrade include stocks (including fractional shares), bonds, ETFs, mutual funds, FX, precious metals and CFDs.

Some of the upsides of using Questrade include:

  1. Low commissions on shares and no commissions on ETFs.
  2. Offers capabilities like short-selling and options for both novice and advanced investors.

The main consideration when using Questrade is that the platform has a relatively higher cost to use than Wealthsimple Trade. While Questrade offers commission-free trading on ETFs similar to Wealthsimple, it charges a ¢0.01 per share commission on stocks and $9.95 per contract for options.

3 benefits to buying stocks in Canada

A stock represents partial ownership of a company. Under most circumstances, each share of stock you own entitles you to a single vote in the company’s Board of Directors. This means that each share you own gives you an interest in the company’s long-term growth prospects, but also means that you may lose money if the stock falls in value.

Some of the key benefits of buying stocks include:

1. Keeping up with rising living costs

As mentioned above, inflation depreciates your dollars over time. By investing in stocks, you are able to keep up with the rising cost of living and ensure that you retain purchasing power even through high inflationary periods.

Here's an example:

Imagine two people who each earned $1000 in 2018. Person A kept the $1000 in a checking account at a bank. Person B invested it in the S&P 500, , an index that tracks the 500 largest stocks by market capitalization in the United States.

In 5 years, Person A would continue to have $1000 at the bank. Meanwhile, a $1000 turned into $1430 for Person B. As can be seen from the above, Person B is a lot better equipped to handle the higher cost of living prevalent today than Person A.

2. Capital gains

Capital gains is a term used to describe the increase in a share’s value over the amount paid for the share. As a company grows and improves its financial performance over time, its share price rises. This provides an opportunity for investors to sell for higher than they bought the share for.

For example, picture an investor who bought a single share of a company for $100 three years ago. Since then, the company’s share price has grown 10% each year (i.e., $110 in Year 1, $121 in Year 2, and $133.10 in Year 3). If the investor chooses to sell now, they would pocket $33.10 over and above the $100 they paid for the share. That is their capital gain.

3. Dividends

Certain stocks also offer income via dividends to their investors. This can be paid out as additional stock, but most companies pay a cash dividend. Each share will be entitled to the same amount of dividend. The more shares you own, the higher your cash payout. Beyond the receipt of cash, dividends are also taxed more favourably compared to regular salary income that you receive from a job.

FAQs About Buying Stocks in Canada

1. How do you buy stocks in Canada without a broker?

If you don’t want to go through a broker (online or otherwise), you can use a Direct Stock Purchase Plan (DSPP). A DSPP lets individuals purchase stocks directly from the company rather than purchasing them via a broker. Several Canadian companies offer shareholders the opportunity to buy stocks through a DSPP. Information about how to enroll into a DSPP can normally be found on the company’s public website.

2. Can I use my RRSP to buy stocks?

Absolutely – you can certainly use your Registered Retirement Savings Plan to buy stocks. The advantage of contributing to such RRSPs is that it reduces your taxable income in that particular year, enabling you to pay lower taxes. Where possible, you should aim to max out your RRSP first before adding any funds to your personal accounts.

3. Can I buy and sell stocks in my TFSA?

While you can certainly buy and sell stocks in your TFSA, you should be careful about the frequency with which you do so. Overly frequent buying and selling can be considered day trading by the Canada Revenue Agency (CRA) and may get flagged for audit.

4. What stocks should I buy when interest rates rise?

When interest rates rise, the central bank is trying to cool down inflation by reducing the demand for assets such as houses and stocks. When this happens, companies in defensive sectors such as telecommunications, and consumer staples like groceries, utilities etc. can potentially be a good buy as these firms generally outperform their peers in a rising rate environment.

5. Can you buy stock after hours?

Depending on the platform you use, you may potentially be allowed to trade a stock after regular trading hours. It should be noted though that you can place the order to buy and sell stock at any time. The order would just be fulfilled during the start of the next trading day.

6. What does limit price mean when buying stocks?

As a buyer, you want to ensure that the price you pay for a stock is not overly expensive. Limit orders enable you to set a maximum price that you are willing to pay for an individual stock. As long as that price is met or below, your order will be executed. If the price remains above your limit set, then the order will automatically expire without completion.

7. Can I buy a stock right before its dividend date?

You can buy a stock at anytime as long as the security is continuing to trade. However, dividend payments have three main dates associated with them:
(i) The record date is when shareholders owning shares are observed and counted
(ii) The ex-dividend date is usually held one business day before the record date
(iii) The payment date is when dividends are distributed to the shareholders
If you buy the share on the ex-dividend date or after, you would not receive the dividend. You only receive the dividend if you buy the stock before the ex-dividend date.

8. Are Canadian bank stocks a good buy?

Depending on your investment objectives, Canadian bank stocks may potentially be a good buy. Bank stocks are particularly attractive for dividend investors as all of the Big Six Canadian banks have offered strong dividend yields historically.

9. How do you buy Tesla stocks in Canada?

To buy Tesla stocks in Canada, you need a brokerage account. Once you have opened your trading account with a bank or online brokerage, you can search Tesla’s ticker (TSLA) and purchase the number of shares you wish to buy based on your preferences and constraints.

10. How do you buy Amazon stocks in Canada?

To buy Amazon stocks in Canada, you need a brokerage account. Once you have opened your trading account with a bank or online brokerage, you can search Amazon’s ticker (AMZN) and purchase the number of shares you wish to buy based on your preferences and constraints.

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