How To Buy ETFs on QTrade

After you have chosen what ETF that you want to buy that suits your asset allocation, the next step is to buy it in your account. This is actually the easiest part of all of the things that you have done to get started with DIY investing. That said, many people get nervous of making a mistake. That is totally understandable when you can move hundreds of thousands of dollars with a click.

I made this page, with screenshots & answers to the FAQs, to help build your confidence. As a DIY investor, you decide and push the buttons, but I hope this page offers support. The first time is usually scary no matter what, followed by “That’s it?”. After several times, you will think of it on the same level as online banking.


In The Wrong Spot?


Login & Customize Names

First, sign in to your Qtrade dashboard using the login & password you created. That will take you to your dashboard.


Customize Account Names (optional)

It is optional, but I like to label my accounts with names that I can easily recognize. The default is the 7-digit account number and type. I have trading authority and can see the accounts of my family members and corporation all on my dashboard. So, having easy names helps me make sure that I am dealing with the right account whenever I do something. I change mine to the person’s name, account type, and account number.

To customize your account names, go to the service center and choose account preferences. Change the names and save. Shown in the slide show below.

Account Buy/Sell Section

There are two ways to do this. For the first time, you need to navigate there. If have already bought in an account, you can take a short cut to buy/sell the same ETF in the same account. That will pre-fill the order info with ETF ticker symbol. I will show both ways to navigate.


First time buying the holding in the account

Go to your account summary page. It will display all of your accounts along with the amount of cash and the securities (the ETFs you own) in each account. Click on the select tab beside the account you want to use and select equity order. That will open the order window. This is shown in the slideshow below. .


Buying more of the same holding in the same account

Go to your account summary page. It will display all of your accounts along with the amount of cash and the securities (the ETFs you own) in each account. Click on the select tab beside the account you want to use and select any of basic view, quote view, or valuation view. That will show the holdings in that account and there will be a buy and sell button. Click the buy button to open the order window. This is shown in the slideshow below.

Go to your account summary page. It will display all of your accounts along with the amount of cash and the securities (the ETFs you own) in each account. Click on the select tab beside the account you want to use and select equity order. That will open the order window. This is shown in the slideshow below. .

Enter ETF Info

When the Order Entry window opens, double check that the account is the one you are planning to buy in.

Next, if the ETF you are planning to buy is listed on the Canadian market (in $CAD), then select Canada for the market. If it is US-listed, the US (and will be priced in $USD). It is important to note that if you are buying something in a different currency than the one you have in the account, then there is an exchange fee. That is why it is best to buy Canadian-listed funds using a $CAD account and if you are holding US-listed funds, to use a separate $USD account.

The symbol is the ticker symbol of what you are planning to buy. For example, XGRO for this iShares Growth Asset Allocation ETF. In the picture, below I am going to buy HXQ which is a Horizon ETF that tracks the Nasdaq 100 but is listed on the Canadian market.

When entered in properly, the most recent pricing of what you are planning to buy will show up in a chart.

Choosing the Order Type

When you are going to buy there are multiple order types to choose from. However, the two that are most useful to a buy and hold investor are “Market” and “Limit” orders. In this section, I will explain a bit about each order type works and the pros/cons. You can use that information to decide what is best for you.

Personally, I hate having to do something more than once or spend much time on it. So, I tend to use a market order with some cash buffer in my accounts unless the market is volatile on the day I am buying, or I am placing a huge order. If I use a limit order, I tend to be less aggressive and make my price limit at the current ask and make the order good for a few days.

Read more below to help you decide on your preferences. I will show the button-clicking of how to do a market or limit order (with pictures) in the next section, but this section gives the background knowledgebase.


Considerations for a Market Order


A market order means that you will buy the quantity of the stock or ETF at the market prices. For example, if I have $100 cash and the most recent price of the ETF is $42.74, then I could buy 2 shares. That would be less than my $100 plus about $15 of cash buffer.

Leave some cash buffer to pay the commissions and accommodate some price increase.

Buffer is important because you need to keep enough cash to pay the trading commission (free for some ETFs, but $6.95 to $8.75 for others). The other reason buffer is important is that the price will fluctuate between the time you place the order, and when it fills. If it were to rise in price dramatically, then you could exceed the cash available in the account. This is unlikely to be a major issue unless the market is very volatile (in which case Qtrade won’t let you place a market order – they will prompt you to use a limit order instead) or you are buying a large number of shares and leaving little buffer.

Example of how a market order can go wrong. Not a disaster, but worthy of a face-palm.

For example, if I put in a market order for 20000 shares of HXQ (when ~$42.74/share) and left $100 buffer, a $0.01 rise in price (common) would mean $200 more and exceed the cash. So, I would then have to sell a few shares – a pain in the butt, an extra commission, and a face-palm [I have done it. More than once. Still, way cheaper than portfolio manager fees].

The other issue with a really large order is that if it is low volume stock, you could potentially push the price up with a large order. That is not a concern for the average ETF investor, but I mention it for completeness.

Summary of using a market order.

In summary, a market order is convenient because you know that it will completely fill. No coming back to find it partially filled or unfilled and having to place a second order. However, you must leave a bit of cash buffer. Further, in a volatile market, you may have to do a “Limit” order instead for your own protection.


Considerations for a Limit Order


A limit order means that you will buy the quantity of the stock or ETF, but only if the price is at or below the limit that your set. For example, if I have $100 cash and the most recent price of the ETF is $42.74, then I could buy 2 shares. The brokerage will try to get you the best price within the order flow that meets your price limit. However, how you set that price limit depends on which you find more annoying. The risk of not getting an aggressively low price vs the risk of the order not filling or partially filling. An unfilled order expires with no commission. A partially filled order generates the regular commission (free for some ETFs or $6.95 to $8.45). You would then need to place another order to spend what is left of your cash.

Setting your price limit.

The chart with the Real Time Quote on the order entry screen gives you some information that is useful to set your price limit. There is the current Bid – the highest price someone is willing to pay and order size in brackets. On the other side of the deal is the Ask – the lowest price someone is willing to sell for and the size in brackets. If you want to see whether there is a line up more on the bid or the ask side, you can look at the Level II data which shows that. Someone always gives in to the tug-of-war, and the last trade price is also shown. It is commonly somewhere between the bid and the ask, but not always (particularly when the market is volatile).

So, if you want to be aggressive, you could set a price limit somewhere between the current bid and the last deal. If you want to have a higher chance of the order filling, you can make your limit closer to the current ask or slightly above the last sale. Qtrade will still try to get the best deal with the live order flow either way.

If you want to be aggressive, another way to decrease the chance of having a partially or unfilled order is to use a longer “Good Through” date. That gives more time for price to hit your target before the order expires. That won’t help if the market only moves up without looking back, but there is usually some volatility along the way.

Example of how a limit order can go wrong. Not a disaster, but worthy of a face-palm.

For example, if the current bid for HXQ is $42.68, ask is $42.72 and last price $42.72, and I am placing a small order for 100 shares. I could try to be aggressive and put in price limit of $42.68 good through the end of today. Unfortunately, the price moves up rapidly and I only fill 50 of those shares. The order expires. Now, I have half the cash I wanted to invest left. If I want to invest it, I will need to place another order. If I had put a higher limit, at say $42.73 the order would have likely filled. My attempt to save $5 is going to cost me $7-9 more and the pain of placing another order. Plus, if the market has continued to rise, then even more.

Summary of using a limit order.

In summary, a limit order is convenient because you can order more shares and leave less cash buffer than a market order because you know you will not exceed your price. You might have to do this if the market is very volatile on the day you are buying. This is also important if trading amount of a thinly traded stock to not drive price (not a concern for the average ETF investor). The potential downside is if you place too tight of limit and order duration in a rising market, then you may have to place multiple orders to invest your cash.

Entering A Market Order

So, you have selected your account, entered the ticker symbol of the ETF you want to buy, and decided to use a market order. Now, you need to select the quantity of shares to buy.

  1. Start with how much cash you have available and subtract the expected commission.
  2. Next, subtract how much cash buffer you want to leave. If it is a small order, you can probably just round down the number of shares you are going to buy (step 3). If a large order, another way is to ballpark how much more the trade will cost if the shares price rises by 0.1% (more if really volatile, less if not).
  3. Divide the amount you want to invest (what is left after your buffer calculation) the last price. Round down to the nearest whole share.
  4. Enter that into the quantity field and click to Review Order.

This process is illustrated in the diagram below.

Entering A Limit Order

So, you have selected your account, entered the ticker symbol of the ETF you want to buy, and decided to use a limit order. Now, you need to select the quantity of shares to buy & price limit

  1. Start with how much cash you have available and subtract the expected commission.
  2. Next, decide on the price limit you want to use. For this example, I will use the ask price.
  3. Divide the amount you want to invest from step 1 by the limit price. Round down to the nearest whole share.
  4. Enter the number of shares in the quantity field.
  5. Change the order type to “Limit”
  6. Enter your limit price. Consider a longer order expiry date if you are being aggressive with a lower price limit.
  7. Click the Review Order button.

This process is illustrated in the diagram below.

Review & Submit

After your order information is entered, double check it on this screen. Qtrade may flag it if the price has changed to exceed your cash if a market order or give other warnings. If everything looks ok, check the accept box to indicate you have reviewed. Enter your trading password. Take deep breath. Then click submit.

Check Order Status

At some later point when the order should have finished, you can check the order status. The order status can be access from multiple places. On your dashboard by hovering over trade and selecting order status. In the account summary area or your account view. If you are checking 2 days after the order filled, it will be in the account history.