|
If your option is a loser or your investment loses value and is delisted or never recovers in your TFSA then you lose that shelter space forever. It’s a bad place to be gambling. Gains are tax free but losses cannot be harvested and cost you shelter space. Way too much downside exposure.
|
#
?
Mar 26, 2020 00:10
|
|
|
|
| # ? May 15, 2024 10:41 |
|
|
cowofwar posted:If your option is a loser or your investment loses value and is delisted or never recovers in your TFSA then you lose that shelter space forever. It’s a bad place to be gambling. Yeah I'm going to open that other account. I still want to clarify with regard to capital gains/losses, so if I put $10k into the account, and for the rest of 2019 I'm up and down and end up at $9k, that's a 1k capital loss, I don't have to pay tax on any profitable options I close throughout the year? And if I end 2019 with $11k in the account I'm basically paying capital gains tax on $1k? Can I claim expenses like my PC, part of my rent, etc even if this isn't the main source of my income? On the upside, I guess pulling my gains over to the cash account from the profitable options will count towards my TFSA contribution room next year since I'm pulling that money out of my TFSA. Really appreciate everyone's feedback. e: If it's interesting to anyone else, Questrade can move open options from one account to another. VelociBacon fucked around with this message at 02:11 on Mar 26, 2020 |
|
#
?
Mar 26, 2020 01:46
|
|
|
VelociBacon posted:Yeah I'm going to open that other account. I still want to clarify with regard to capital gains/losses, so if I put $10k into the account, and for the rest of 2019 I'm up and down and end up at $9k, that's a 1k capital loss, I don't have to pay tax on any profitable options I close throughout the year? And if I end 2019 with $11k in the account I'm basically paying capital gains tax on $1k? Can I claim expenses like my PC, part of my rent, etc even if this isn't the main source of my income? There aren’t really capital gains or losses per se in a TFSA account. You’d probably have to seek pro advice for dealing with options in a TFSA. The more complex things you do in a TFSA the more likely it wont be reported correctly to the CRA and you may end up in an auditing nightmare scenario.
|
|
#
?
Mar 26, 2020 02:24
|
|
|
cowofwar posted:There aren’t really capital gains or losses per se in a TFSA account. You’d probably have to seek pro advice for dealing with options in a TFSA. Yes I'm referring to the capital gains/losses in a cash account, sorry I should have been more clear. I completely get that there is nothing to declare in a TFSA. I agree that it sounds like a nightmare. My father was audited for tax stuff related to his small business and I remember his anguish and frustration in that period despite being very young at the time.
|
|
#
?
Mar 26, 2020 03:09
|
|
|
I forget if it's come up before, but https://www.adjustedcostbase.ca/ is real handy for keeping track of gains and losses for tax purposes. Nothing you can't do easily enough yourself of course, or you can trust your brokerage I guess. Lots of useful info on their blog too.
|
|
#
?
Mar 26, 2020 03:40
|
|
|
VelociBacon posted:Can I claim expenses like my PC, part of my rent, etc even if this isn't the main source of my income? No, of course not.
|
|
#
?
Mar 26, 2020 03:41
|
|
|
The phrase you're looking for is "realized vs. unrealized capital gains". If you purchase an investment for $10k and it goes up to $11k that investment now has $1k of unrealized capital gains. You don't have to pay any tax on it until the gain is realized, which can happen in a few ways, but most commonly if you sell it. For scenarios more complicated than the simple example above you'll need to keep track of something called the "cost basis" or "adjusted cost base" of your investment. As you purchase more shares at different prices, or participate in a DRIP, or receive distributions containing return of capital (for ETF's), and so on, the cost basis will change. Then, when you sell, you use the cost basis to determine the capital gain (or loss). Let's say your $10k investment grew to $12k and your costs basis became $11k. If you sold $6k worth of shares (50% of your shares) the costs basis of those shares would be $5.5k (50% of the $11k cost basis) and you would realize a capital gain of $500. The remaining $6k of shares would similarly have a $5.5k cost basis. There is a technique called "tax loss harvesting" which is where you deliberately realize a large capital loss in order to save money on taxes now (or in the near future by carrying forward the loss) at the expense of a larger capital gain in the distant future. This is usually a good idea but it's worth learning about something called the "superficial loss rule" if you decide to pursue this strategy. My apologies if you already knew most of this but perhaps it will be useful to any thread lurkers. I should also note that all of this only applies to unregistered accounts. Registered accounts don't care about capital gains.
|
|
#
?
Mar 26, 2020 03:45
|
|
|
I wasn't really thinking since it's been a fairly smooth thing in the past, but initiated a Norberts gambit two days ago, USD-CAD dropped 2 cents in that time, won't be able to complete it until tomorrow. Looks like it's pretty much going to end up costing the same as just having done the instant conversion with the usual fees, but with a 3 day lag to complete instead. Guess that's why it's call a "gambit" and not a "100% guaranteed easy way to avoid conversion fees". 
|
|
#
?
Mar 26, 2020 21:23
|
|
|
pokeyman posted:I forget if it's come up before, but https://www.adjustedcostbase.ca/ is real handy for keeping track of gains and losses for tax purposes. Nothing you can't do easily enough yourself of course, or you can trust your brokerage I guess. Lots of useful info on their blog too. I must've spent an entire week learning how to do the simple math of calculating the adjusted cost base of a disposed asset in college. We actually still have to do it manually for a few clients because their investment firms somehow don't include cost bases for all disposed-of investments. We'll download T5008's for their annual T1 returns and I'd say a good 80% of the time, they omit the cost base, leaving us to either call them or their broker for their trading summaries or statements for the year. I say monthly statements because even the annual summaries won't include a cost base. I don't know how it works on the broker's side so I can't comment on that, but it's still annoying when almost every other bit of registered investment income has slips you just put in like you do employment income. Incidentally, I just got an email from my boss updating us on the income tax extensions CRA's allowing, so it looks like I'll be doing tax returns mostly from the comfort of my own home this tax season. I wonder if I can convince them to sign a T2200 so I can get a home office employment expense credit.
|
|
#
?
Mar 26, 2020 22:15
|
|
|
The gambit just means you pay a fixed conversion fee. It doesn't mean you pay a fixed conversion rate. If you do a currency exchange in cash you are exposed to the same conversion rate risk in addition to paying a percentage based conversion fee.
|
|
#
?
Mar 26, 2020 22:16
|
|
|
Yeah but usually the rate doesn't move much in 3 days using the DLR ones since most of the time currency fluctuations are pretty minor. You know, when the world isn't in freakout crisis mode and all. I didn't think to check what the exchange rate has been doing so it's on me for not even thinking about the underlying. Live and learn.
|
|
#
?
Mar 26, 2020 22:23
|
|
|
I was discussing this exact topic with a friend recently. We couldn't quite agree if there was indeed currency risk during the settling period - my position is that there is no currency risk if you are going CAD => USD (because you are waiting for the sale of DLR.U to settle, and it's priced in USD). However, going the other direction, I would argue, does have the risk (you're waiting for DLR to settle, which fluctuates with USDCAD). Can anyone confirm/deny the above? Also: this seems to only be an issue at certain brokerages. At Investorline, you can buy and sell near-simultaneously - with no 3-day gap.
|
|
#
?
Mar 26, 2020 23:12
|
|
|
Same risk in either direction as far as I'm understanding it, at least with Questrade. You need 2 days for DLR or DLR.U to settle before they will journal it. As soon as the journaling is done you can sell and the price is locked in then.
|
|
#
?
Mar 26, 2020 23:25
|
|
|
Lexicon posted:I was discussing this exact topic with a friend recently. We couldn't quite agree if there was indeed currency risk during the settling period - my position is that there is no currency risk if you are going CAD => USD (because you are waiting for the sale of DLR.U to settle, and it's priced in USD). However, going the other direction, I would argue, does have the risk (you're waiting for DLR to settle, which fluctuates with USDCAD). You are 100% correct and not enough people understand this. As soon as you buy DLR, you are long the USD. You have locked in your rate. Whether you journal immediatley or 2 days later or a month later, you will get the same amount of USD because DLR.U doesn't really move. If you go the other way, you lock in your rate when you sell DLR. So while you are waiting to journal, the rate keeps moving.
|
|
#
?
Mar 26, 2020 23:37
|
|
|
The Butcher posted:Same risk in either direction as far as I'm understanding it, at least with Questrade. This is incorrect. See my other post.
|
|
#
?
Mar 26, 2020 23:37
|
|
|
Lexicon posted:I was discussing this exact topic with a friend recently. We couldn't quite agree if there was indeed currency risk during the settling period - my position is that there is no currency risk if you are going CAD => USD (because you are waiting for the sale of DLR.U to settle, and it's priced in USD). However, going the other direction, I would argue, does have the risk (you're waiting for DLR to settle, which fluctuates with USDCAD). I'm with you. Once you buy DLR you effectively hold USD.
|
|
#
?
Mar 26, 2020 23:38
|
|
|
Maybe a more concrete way of looking at it is that the DLR rate is floating, but when you buy 100 units at, say, C$14.21, each of those units is equivalent to DLR.U which is worth a pretty stable amount of USD. Take a look back at the price charts for DLR.U and you'll see it's been between US$10.12 and 10.13, which are the current bid and ask prices. Whether you pay $C14.21, or C$14.50, or C$20 for each unit of DLR, you'll be able to sell it for US$10.12-10.13 regardless of how long it takes to settle.* Today I did a Norbert's Gambit with DLR on CIBC Investor's Edge, for the first time. Process was: 1) Entered a limit order for DLR at $14.22, paid C$6.95 commission 2) Waited for it to fill, took about an hour for market to hit my price 3) Called IE (waited on hold for an hour to speak to a trader, yikes). Asked to journal DLR to DLR.U, and put in a limit order at US$10.13 and confirmed I'll be paying a US$6.95 commission. 4) Wait for order to fill, could take a little while since there's not much liquidity * Note: not strictly true, as DLR/DLR.U has an MER and also pays a dividend so the price of DLR.U does float a bit but very slowly. Don't forget about the tax implications, either. The difference between the value in CAD (per the average rate for that day as posted by the Bank of Canada) of the USD you receive on the settlement date when you sell DLR.U and what you paid for your DLR when you bought them goes into your ACB calculation and you'll likely have a (usually small) capital gain or lose. See here. The Butcher, this is bad news for you because when you bought your DLR (say C$100k worth), by the time you sold your DLR.U and the trade settled, the CAD had weakened so that the USD you received were actually worth C$102k. This means you made a capital gain of C$2k and get to pay tax on that.
|
|
#
?
Mar 27, 2020 00:41
|
|
|
Thanks for the clarification Kal, you're pretty good at this poo poo. I think I get it. Missed the detail of the DLR.U side not changing. Even if you could get the USD instantly, that USD would be worth however much more or less in CAD a few days later. The changing price of DLR in CAD while sitting there waiting to be journaled just reflects that difference. So as long as you don't need the conversion instantly, NG will always be the better choice than a spot conversion? Or is there any way it could end up not working? Ah, like that vvv spoof posted:The Butcher, this is bad news for you because when you bought your DLR (say C$100k worth), by the time you sold your DLR.U and the trade settled, the CAD had weakened so that the USD you received were actually worth C$102k. This means you made a capital gain of C$2k and get to pay tax on that. Fortunately it was not $100k worth lol, but that's helpful to know and a good thing to keep in mind. The Butcher fucked around with this message at 03:24 on Mar 27, 2020 |
|
#
?
Mar 27, 2020 00:53
|
|
|
The Butcher posted:So as long as you don't need the conversion instantly, NG will always be the better choice than a spot conversion? Or is there any way it could end up not working? NG will always be better than the spot conversion at the majority of brokers. That's because they tack on a fee that is anywhere from 1%-2.5% depending on the broker. However, if you use a broker like IB, you can go right to the market with a .0001 bid/ask spread and exchange for a $2 commission. You can't do better than that. However, you also have to keep in mind what you intend to do with the USD when you have it. If you journal immediately, buy a stock, and the market drops, you'd have been better off waiting the 2 days. But that's just luck and out of your control.
|
|
#
?
Mar 27, 2020 02:01
|
|
|
Kal Torak posted:You are 100% correct and not enough people understand this. As soon as you buy DLR, you are long the USD. You have locked in your rate. Whether you journal immediatley or 2 days later or a month later, you will get the same amount of USD because DLR.U doesn't really move. Sweet, thanks for the confirmation.
|
|
#
?
Mar 27, 2020 06:24
|
|
|
Is anyone else using questrade? They are getting crushed under the volume the past week. Might be time to shop brokerages
|
|
#
?
Mar 27, 2020 14:53
|
|
|
Risky Bisquick posted:Is anyone else using questrade? They are getting crushed under the volume the past week. Might be time to shop brokerages Yeah, it's been up and down for me. I actually applied for a cash account with thinkorswim last night just so I could leave it empty and use their tools. I really hate the 15min refresh on the free QT positions page. e: also QT is giving me double notifications sometimes from their terrible phone app. Like an execution of an order notification and 10 min later another one, made me think I somehow entered two orders. Not great. VelociBacon fucked around with this message at 15:03 on Mar 27, 2020 |
|
#
?
Mar 27, 2020 14:56
|
|
|
Interest rate lowered again to .25
|
|
#
?
Mar 27, 2020 15:54
|
|
|
I'm slowly picking up CN and Loblaws stock a little each week. Could be a big mistake, but I'm lucky enough to still be employed and my spending has gone way down. 
|
|
#
?
Mar 27, 2020 16:30
|
|
|
Bonzo posted:Interest rate lowered again to .25 Also $5 billion in quantitative easing a week.
|
|
#
?
Mar 27, 2020 16:54
|
|
|
wealthsimple has had me on a wait list for new accounts for more than a week now, "due to unprecedented market volatility and high trading volumes as a result of the pandemic." I really don't feel it was clear that I wouldn't be able to trade when I deposited the money, and there's no sign of when it will end. Definitely avoid wealthsimple if you're looking to open an account for now!
|
|
#
?
Mar 27, 2020 17:28
|
|
|
I don't know if they will survive this. They seem to have been wanting to complete with banks by offering the Cash account with debit card (was coming soon) but I'm not sure that will fly as the only real selling point was the interest rate which has now dropped to almost nothing. They've been sending at least 2 "don't panic" emails a week When you withdraw money, there's a drop down to list why you are taking it out (not happy, medical emergency, etc.) which I get. They want to know why you removing monies from them but it feels like I'm asking my parents if I can have an advance on my allowance.
|
|
#
?
Mar 27, 2020 21:55
|
|
|
So here's my situation: I get paid and have nearly all my holdings in USD. However, I do have need in the medium to long term for a sizable amount of CAD. CAD is looking pretty cheap these days and am willing to bet we have hit near-bottom if it gets lower than .70 USD. Whatever CAD I purchase, I don't want it to sit as idle cash. Instead, I want it invested in a US Market ETF. So is it possible to purchase and hold CAD while using said CAD to invest in the US Market? I'm basically trying to put a bet on both currency and equity upswing with the same stack of chips. Is VSP (S&P 500, Hedged) the correct play here?
|
|
#
?
Mar 28, 2020 12:50
|
|
|
Banana Canada posted:So here's my situation: Yes, there are a bunch of Canadian ETFs that invest in US stock market. Two I've used are VFV.TO for the S&P 500 or VUN.TO for the whole US market. edit: nvm, I misunderstood your post. I don't do hedging, and the couch potato guy says it just doesn't make sense in Canada Square Peg fucked around with this message at 18:06 on Mar 28, 2020 |
|
#
?
Mar 28, 2020 17:59
|
|
|
Oil stocks are down quite a bit and historically, this is a good time to invest. What's the likely hood of them getting a bail out? As much as most of them talk about switching to renewables I just don't see that happening in the next 18 months. I mean, Alberta has been hit hard and I don't think the PCs will give up anytime soon.
|
|
#
?
Mar 28, 2020 18:56
|
|
|
Square Peg posted:I don't do hedging, and the couch potato guy says it just doesn't make sense in Canada Efficiency aside I also just don't mentally like it. If the news says the market went up 4% that day, I want the portfolio to reflect that. Sucks to check it and see it not matching, even if big brain knows its a more complex calculation then that.
|
|
#
?
Mar 28, 2020 19:05
|
|
|
Bonzo posted:Oil stocks are down quite a bit and historically, this is a good time to invest. What's the likely hood of them getting a bail out? As much as most of them talk about switching to renewables I just don't see that happening in the next 18 months. I mean, Alberta has been hit hard and I don't think the PCs will give up anytime soon. Who gives a poo poo, even if they get bailed out, you'd have to be stupid and/or a FYGM boomer to invest in an industry that's still more likely to kill all life on Earth than the 'rona.
|
|
#
?
Mar 28, 2020 20:03
|
|
|
Bonzo posted:Oil stocks are down quite a bit and historically, this is a good time to invest. What's the likely hood of them getting a bail out? As much as most of them talk about switching to renewables I just don't see that happening in the next 18 months. I mean, Alberta has been hit hard and I don't think the PCs will give up anytime soon. Just because a companies share price is low or at an ATL, is not an indicator it is a good buy. Do you foresee higher oil prices in the future? Are you aware of these companies cash flow situation? Whether they are burning cash? Their upcoming debt payments? I would take care to understand these answers about specific companies before putting money on the line.
|
|
#
?
Mar 28, 2020 20:24
|
|
|
History isn’t indicative of future performance. There are potential scenarios in which Alberta oil becomes wildly profitable again, and many others in which the industry just never comes back and the oil ends up being left in the ground for good.
|
|
#
?
Mar 28, 2020 20:27
|
|
|
Square Peg posted:Yes, there are a bunch of Canadian ETFs that invest in US stock market. Two I've used are VFV.TO for the S&P 500 or VUN.TO for the whole US market. A friend of mine sent me the same link but I don't think it addresses or refutes my starting premise. I am starting with the conviction that CAD is near ground-level and can only go up or, at the very least, stay level. To look at it another way, let's say I buy unhedged VFV. CAD strengthens by 5% and S&P 500 also rises by 5%. Disregarding dividends and MERs, wouldn't this would mean that the price of each CAD-denominated VFV share will have not moved even though its VOO counterpart would have gone up 5%? I'll have nil gains in CAD if I sell the shares at this point. Equivalent to that would be buying VOO with USD. In the same scenario, if I were to sell for the 5% market gain and then convert it to CAD, it would again net out to zero if I look at it from the point of view of CAD as valued today. I consider both of these as effectively a bet for the US Market and against CAD. What I seek is a way to bet for the US Market and for CAD at the same time if that is even possible. Is the hedged VSP a way I could do this? I'll admit that i know next to nothing about how hedging works in these ETFs and would be very much open to having someone explain to me that "hedging doesn't work this way" or hear out other reasons why this could be bad idea/can't be done.
|
|
#
?
Mar 28, 2020 20:49
|
|
|
That's p much how it would work, you're betting the premium you pay for hedging will be less than what you stand to gain. Would a lot of people trying to capitalize on that idea be enough to reduce the potential upside?
|
|
#
?
Mar 28, 2020 20:54
|
|
|
Is it more expensive though? VFV and VSP are both 0.09%.
|
|
#
?
Mar 28, 2020 22:32
|
|
|
Banana Canada posted:Is it more expensive though? VFV and VSP are both 0.09%. The additional costs are internal to the fund, I believe, and have to do with the contracts the funds use to do their hedging. Personally I don't see any reason the Canadian dollar will ever go significantly up, the only real reason it ever got close to the US dollar was due to Dutch disease from the tarsands and those might be irrevocably hosed thanks to global market forces, the pandemic, and everyone (hopefully) switching to non-fossil fuel sources. But even if I'm wrong, currency hedging is still analogous to market-timing, imo.
|
|
#
?
Mar 29, 2020 01:21
|
|
|
Betting on Alberta would be a wild gamble, if you want to put money on O&G restrict it to the big internationals who aren't beholden to local inventory and are 50-60% below three weeks ago. Those guys will rebound at least 20% or more (full recovery being tied to global consumption ticking back up) once Saudi Arabia realizes it's going bankrupt, Alberta? Who the gently caress knows. IMO we'll see a supply shortage in 2021/22 due to producers reducing way below pre-crash as a protective measure and leaving it there, but industrial civilization could also have ended at that point making oil - and money - pretty much worthless.
|
|
#
?
Mar 29, 2020 01:47
|
|
|
|
| # ? May 15, 2024 10:41 |
|
|
Rime posted:Betting on Alberta would be a wild gamble, if you want to put money on O&G restrict it to the big internationals who aren't beholden to local inventory and are 50-60% below three weeks ago. Those guys will rebound at least 20% or more (full recovery being tied to global consumption ticking back up) once Saudi Arabia realizes it's going bankrupt, Alberta? Who the gently caress knows. Global demand for oil will not likely return to pre-pandemic levels as companies get used to people working from home and not paying for business travel and instead embracing the cost savings of remote work. The previous Status quo has never been so perilous, a lot of things are going to change and become the new normal for better and for worse.
|
|
#
?
Mar 29, 2020 01:54
|
|