How to buy Canadian shares in the UK
Canada’s stock market has a lot to offer investors – including a large economy, relative stability and new opportunities such as cannabis. If you’re considering buying Canadian shares in the UK, here are six steps to get started.
Choose how you want to buy Canadian shares
There are two ways to buy Canadian stocks in the UK: invest in them via share trading, or trade them via CFDs. Both offer exposure to the movements of Canadian share prices but they operate in different ways, and come with unique benefits and risks. Here’s a rundown of each:
Investing in Canadian shares
When you invest in stocks, you’re buying them outright and adding them to your share trading portfolio. You pay commission to open your position and put up the full cost of the shares upfront.
There are two ways to profit from investing:
- By selling your shares for more than you paid for them
- By choosing companies that pay a dividend
A dividend is a portion of a company’s net profit that is returned to shareholders. If a stock you hold decides to pay $3 per share back to its investors, for example, you’ll get $3 for every share you own in the company. With IG, you’ll receive dividend payments directly into your account as soon as we receive them.
Why would I invest?
- You want to operate a ‘buy to hold’ strategy
- You usually take a medium- to long-term view
- You prefer sticking to fundamental analysis
- You only want to profit from rising markets or dividends
- You’re happy to pay the full value of your position upfront
What Canadian shares can I invest in?
You can invest in any Canadian company that has a dual listing on a US exchange using your share trading account. This gives you access to a wide range of blue-chip stocks – including nine of the ten largest Canadian companies by market cap – but it doesn’t include most stocks with a sole listing on the Toronto Stock Exchange (TSX).
Trading Canadian shares
When you trade stocks, you aren’t buying them outright. Instead, you’re speculating on their price movements – so you can profit from volatility without taking ownership of the underlying assets.
This brings two main benefits for traders. Firstly, you can go short as well as long. So if you think that a stock is due for a downturn, you can short it to make a profit from a fall in price. And second, you only have to pay a deposit called ‘margin’ to open your position. To trade $5000 in Royal Bank of Canada stock, for example, you might only have to pay $1000 upfront.
You will, however, pay overnight funding charges to cover the cost of maintaining your position over multiple days – you’ll pay these each night on rolling positions, or at the outset for share forwards. So if you’re planning on buying stocks and holding them over a long period, investing might be the better option.
Why would I trade?
- You want to go long and short
- You’re planning on taking a short- to medium-term view
- You’re interested in fundamental and technical analysis
- You don’t plan on profiting from dividends
- You want to trade on margin
What Canadian shares can I trade?
You can use CFDs to trade any Canadian company that has a dual listing on a US exchange, plus hundreds of stocks listed solely on the TSX.
Open a shares account
With IG, you can choose whether you want to start share trading or CFD trading – or a mix of both – when you open an account. You can open an account on our website or via our app in minutes.
Once your account is live, you can choose from over 12,000 companies and funds to trade or invest in, including a range of Canadian stocks that are listed on US exchanges. And if you need any help at all learning to use our platform, you’ll have access to dedicated 24-hour support.
Already own US-listed shares? You can transfer them to your IG account quickly and easily.
Complete a W8-BEN form
The W8-BEN form is required by the American Inland Revenue Service (IRS) for any individual who wants to buy shares through US exchanges. That means UK investors who want to buy Canadian companies that are listed on US exchanges will need to fill out a W-8BEN first.
You’ll need to fill out a W8-BEN to open positions on US stocks via CFDs.
Understand the charges to buy Canadian shares
If you’re looking to invest in stocks, then you’ll pay commission to open your position. You can use your IG account to invest in Canadian shares listed on US exchanges at our standard commission rate of £10. If you place more than three IG trades in a particular month, then you won’t pay any commission to open your position.
How much does it cost to buy US-listed shares from the UK?
|Standard commission||Best commission||FX conversion fee|
Data taken from competitor websites, correct at 05 April 2020.
You’ll need to buy Canadian shares on US exchanges in US dollars. When you open your position, we’ll automatically convert your pounds into dollars for just a 0.5% fee. There may be other charges, such as custody fees.
View a full list of our charges for investing in US shares.
For share CFDs you pay commission. This doesn't incur a currency conversion fee, but there may be other charges.
Choose the Canadian shares you want to buy
Next up, it’s time to decide which companies you want to buy. If you’re investing, then you’ll want to focus on Canadian stocks with a dual listing on a US exchange. Lots of blue chips are listed on both the TSX and the NYSE, so there are plenty to choose from.
You could, for instance:
Buy Canadian shares
The final step is to fund your account and buy your stocks. To find your chosen companies, simply log in to your account and search for them in the ‘finder’ bar.
If you want to open your position immediately at the best available price, you can use a market order. If you have a specific price in mind, you can use a limit order. With limit orders, we’ll open your position automatically when your chosen share hits the price you specify.
Buying Canadian shares summed up
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.