Re­tail in­vestors say they’re los­ing thou­sands as bro­ker­ages strug­gle

Spike in trad­ing vol­ume amid sell-off causes out­ages, glitches in sys­tem

Edmonton Journal - - FP EDMONTON - VIC­TOR FER­REIRA

Self-di­rected online bro­ker­ages have not been cop­ing well with the ad­di­tional vol­ume brought on by a dev­as­tat­ing month-long sell­off, ac­cord­ing to re­tail in­vestors who are com­plain­ing that mul­ti­ple out­ages and ap­par­ent bugs in the sys­tems have cost them thou­sands of dol­lars.

The com­bi­na­tion of a coro­n­avirus-in­spired sell-off that quickly brought forth a bear mar­ket and the coun­try-wide shut­down that has forced most Cana­di­ans to work from home has led to a huge spike in trad­ing vol­ume. TD Di­rect In­vest­ing said re­cent vol­umes were nearly three times the aver­age, while BMO In­vestor­line said ac­tiv­ity has hit record lev­els.

But the in­crease has mul­ti­ple re­tail in­vestors com­plain­ing about is­sues rang­ing from not be­ing able to log in to trad­ing plat­forms to out­right service out­ages. Try­ing to contact cus­tomer service has led to fur­ther com­plaints, with in­vestors be­ing placed on hold for up­wards of two hours.

“It’s hap­pen­ing across the board,” said Rick Da Costa, a re­tail in­vestor who runs Fi­, a mem­ber­ship-based web­site that men­tors in­vestors. “If a trade goes against you, you take a big loss and it’s no fault of your own, just the fact that your bro­ker was not able to han­dle the vol­ume.”

Over the past month, Da Costa has heard horror stories from his web­site’s 170 mem­bers and he’s ex­pe­ri­enced them first-hand as well as a day trader who places about 10 trades per day on TD Web Bro­ker.

Da Costa said he put a siz­able po­si­tion on the Direx­ion Daily S&P 500 Bull 3X Shares, a volatile ex­change-traded fund that gives in­vestors three times the re­turns or three times the losses of the S&P 500, on March 3.

Af­ter be­ing up seven per cent on his po­si­tion, he added a trail­ing stop, an or­der that trig­gers a sell if the mar­ket price falls un­der a cer­tain price or per­cent­age point. But the trail­ing stop was never ex­e­cuted and the five-per-cent profit Da Costa at­tempted to se­cure with it turned into a five-per-cent loss by the time he reached cus­tomer service.

“I don’t want to give the de­tails in terms of dol­lars, but it was enough to ruin your day,” he said. “If you don’t have ac­cess to get in and out, you’re at the mercy of the mar­ket.”

Two weeks af­ter Da Costa’s ex­pe­ri­ence, TD Web Bro­ker on March 19 pub­lished a note warn­ing clients that stop or­ders on ex­change-traded prod­ucts would be han­dled on a “best ef­forts ba­sis only.”

Corey Miller, who also uses TD Web Bro­ker, had a sim­i­lar ex­pe­ri­ence while trad­ing shares of Canopy Growth Corp. on March 10.

He meant to buy shares of the cannabis pro­ducer so that he could flip them in as fast as 15 min­utes. But he said the online plat­form told him he didn’t have any shares when he sub­se­quently tried to sell them.

Af­ter wait­ing hours on the phone, he still couldn’t reach a rep­re­sen­ta­tive to clar­ify the trade’s sta­tus.

Miller would only find out that his Canopy or­der has been filled when the po­si­tion ap­peared in his port­fo­lio for the first time the next day. By the time he was able to close his po­si­tion, he took a loss of $6,846. For his trou­bles, cus­tomer service gave him a $500 credit, he said.

Miller, Da Costa and an­other TD Web Bro­ker client also re­ported lag­ging bid and ask prices on stocks and out­dated charts.

Be­fore be­ing told about the spe­cific is­sues in­vestors were flag­ging, TD Di­rect In­vest­ing pres­i­dent Paul Clark said the bro­ker­age was work­ing well and that its per­for­mance will con­tinue to be mon­i­tored.

“We’ve in­vested in sig­nif­i­cant ca­pac­ity up­grades in re­cent years, which en­sures we can serve our clients even dur­ing peak times,” Clark said in an emailed state­ment.

The banks, like many Cana­dian busi­nesses, have faced their share of chal­lenges in giv­ing their work­force the abil­ity to work re­motely.

Last week, Fi­nan­cial Post re­ported that banks such as Bank of Mon­treal and Cana­dian Im­pe­rial Bank of Com­merce were only al­low­ing some re­mote em­ploy­ees to work be­tween 9 a.m. and 5 p.m. due to net­work con­straints.

BMO In­vestor­line pres­i­dent Sil­vio Stroescu sent a note to all of the bro­ker­age’s clients say­ing that it is in­creas­ing ca­pac­ity for em­ploy­ees to work re­motely. He also said In­vestor­line was ex­pe­ri­enc­ing “de­lays with re­quests to set up new ac­counts, trans­fer funds into your trad­ing ac­counts and gen­eral ac­count ser­vic­ing.”

One In­vestor­line client, who did not want to be named, said the online bro­ker­age crashed for an hour on March 17 while he had a limit or­der on an options con­tract listed as pend­ing.

Typ­i­cally, In­vestor­line ap­proves those or­ders, which lock in a sale of the con­tract once its price passes a cer­tain thresh­old, in three min­utes, he said. Now, he’s wait­ing up to an hour. The crash only com­pli­cated mat­ters, be­cause his limit was reached while the plat­form was down.

An­other In­vestor­line client, who wished to re­main anony­mous, said his or­ders have been com­pleted, but his port­fo­lio isn’t be­ing up­dated with new po­si­tions un­til af­ter mar­ket hours.

Over at RBC Di­rect In­vest­ing, a spokesper­son said it has ex­pe­ri­enced “in­ter­mit­tent is­sues” with pages and in­for­ma­tion up­dates load­ing slowly. An in­creased num­ber of client in­quiries was lead­ing to longer wait times to reach cus­tomer service.

If a trade goes against you, you take a big loss and it’s no fault of your own, just the fact that your bro­ker was not able to han­dle the vol­ume.


Peo­ple walk past a tem­po­rar­ily closed-down clothes store in Dublin, Ire­land, on Wed­nes­day. While some try to get a bit of fresh air dur­ing the pan­demic, be­hind closed doors day traders are strug­gling online just to com­plete a sin­gle trans­ac­tion.

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