Picking the right online broker for trading marijuana stocks can be a difficult decision. Different traders have different priorities depending on their investment strategy.
For instance, a trader that employs a technical analysis approach to making investment decisions might prefer the online broker offering the best chart functionality and real-time data. On the other hand, a long-term buy-and-hold value investor might prefer the online broker offering free access to Wall Street analyst reports and proprietary valuation metrics.
Even when it comes to trading marijuana stocks, every investor needs to consider the same things that they’d need to consider if it were any other sector. In fact, there may actually be a few extra things to evaluate before picking your pot stock broker.
Is E-Trade the Best Broker for Trading Marijuana Stocks?
Important considerations like international market access come into play depending on which marijuana stocks you want access to (or maybe you want access to them all!).
Even if you only own or are interested in trading domestically-domiciled and domestically-listed marijuana stocks right now, that is always subject to change in the future.
Just remember that not all of the best marijuana stocks are listed on the big exchanges like the NYSE or NASDAQ. Many of the largest cannabis companies in the world are traded over-the-counter, a.k.a. OTC, or on international exchanges up in Canada or elsewhere.
Beyond international market access, it’s also extremely important to consider commissions when trading marijuana stocks.
Since E*Trade is one of the most commonly used online brokers here in the United States, we wanted to make an informative guide helping our readers determine if it is the right broker for their marijuana stock trading needs.
If you’re not from the United States though, you can stop right here because non-U.S. residents started complaining back in 2016 that E-Trade was a non-starter. For those that are not U.S. citizens but still want to trade a wide variety of marijuana stocks, SureTrader might be the best way to go.
U.S. Market Access
First and foremost, investors demand access to U.S. markets because they are home to some of the biggest and best public companies in the world. When it comes to marijuana stocks, the U.S. markets are even home to even the largest Canadian cannabis producer by market cap., Tilray, Inc. (NASDAQ:TLRY).
Investors considering E-Trade can rest assured knowing that the broker is a solid option for accessing U.S. listed marijuana stocks that trade on the NASDAQ or the NYSE. Examples of marijuana stocks like this include the cannabis REIT, Innovative Industrial Properties (NYSE:IIPR), as well as GW Pharmaceuticals (NASDAQ:GWPH) and more from the cannabinoid biotech space and beyond. This also includes access to the marijuana-focused ETF, the ETFMG Alternative Harvest ETF (NYSE:MJ).
Over-the-counter cannabis stocks based in the United States, such as CV Sciences (OTC:CVSI) and Helix TCS (OTC:HLIX) are also available on E-Trade. Unlike some brokers, E-Trade offers easy access to OTC-listed stocks, making a vast majority of marijuana stocks available for trading on E-Trade, including many international listings.
International Market Access
As mentioned above, marijuana-related stocks are trading on exchanges all around the world. From Frankfurt to Australia, there are more and more investment opportunities popping up every day. That being said, there’s good news and there’s bad news when it comes to international market access through E-Trade.
The bad news is that E-Trade no longer has a Global Trading platform, which means you no longer have direct market access to exchanges all around the globe.
The good news is that most internationally-based cannabis stocks are dual-listed on the OTC markets. For instance, Invictus MD Strategies Corp. is listed on the TSXV in Canada under the ticker GENE, but also has a listing on the OTC Markets under the ticker IVITF.
Last but not least, we want to touch on commissions because traders hate commissions. The more actively you trade, the more that commission costs can add up. Whether you made money or lost money on your trade, you still have to pay!
Marijuana stocks can range in share price from lower than $0.01 per share all the way up to over $100 per share. Where your average sweet spot is on that spectrum will determine whether or not you should be seeking out a broker with a flat-rate commission structure or a broker offering a per-share commision structure.
E-Trade is a flat-rate broker, which means that it can be an especially great platform for folks who like the lower-price-per-share pot stocks.
For example, if a broker charged $0.01 per share in commissions and you wanted to invest $1,000 in Advantis Corp. (OTC:ADVT), the trade alone could cost you $555.55 given the fact that shares of ADVT currently trade at $0.018 per share.
Since the $1,000 investment in Advantis would be for the purchase of roughly 55,555 shares, you’d be foolish not to use a broker like E-Trade to facilitate it since it would only cost $6.95 or less.
The reason commissions can get even cheaper than $6.95 per trade on E-Trade is that traders who make more than 30 trades per quarter get a commission discount, making it $4.95 per stock, options, or ETF trade. Standard commissions, however, are still only $6.95 per stock, options, or ETF trade.
For less active traders that still want to pay just $4.95 per trade, Ally Invest may be the way to go.
Remember that choosing the right online broker for trading marijuana stocks can be a difficult decision, but it isn’t make-or-break. You can always take your money out and move to another broker if you aren’t happy.
To compare a handful of brokers that offer access to cannabis-related stocks, check out our marijuana stock broker database here.
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