About Investing In Equities
Introduction
Whatever your investment preferences or objectives, with TD Waterhouse you can
buy or sell equities listed on all North American stock exchanges, and virtually
every major stock market in the world. Equity investments available through
TD Waterhouse include common stock, preferred stock, rights and warrants.
There are two major types of stock markets, auction and dealer. The prices
of exchange-listed stocks in an auction market are determined by the forces
of supply and demand. Individual client orders to buy a stock are relayed
to the exchange, where they are posted and matched with outstanding order
to sell. The TSE and NYSE are examples or auction markets.
When you trade equities in a dealer market, you are buying from or selling
to a dealer that trades with a network or other dealers. These are negotiated
markets where the bid and ask quotations are entered by the dealers acting
as 'market makers' in a particular security. The Canadian Dealing Network
and NASDAQ in the U.S. are dealer (or over-the-counter) markets.
Types of Orders
Here are a few examples of terminology you can use when conveying your
instructions about equities trading to a TD Waterhouse Investment Representative.
Market Order
Your order to buy or sell a security at the best available
price. With TD Waterhouse's state-of-the-art trading systems, most market orders
can be filled and confirmed immediately (during trading hours).
Limit Order
You set the maximum price you are willing to pay for
a stock as a buyer or the minimum price you are willing to accept as a seller
~ usually within 10% of market price. Types of limit orders include:
Day Order - An order valid only for the day on which it is entered.
Open Order - Remains valid at a specific price until the order is
executed or cancelled, to a maximum of 30 days (and then automatically
cancelled).
Stop Loss Order - An order to sell, which becomes effective as a market
order when one board lot trades at or below the stated limit (stop) price.
A Stop Buy Order is just the opposite, effective when the price reaches or
exceeds the stop limit.
Stop Limit Order - A variation of the stop loss. The order starts
to get filled at the price specified (trigger price) once one board lot trades
at that price. The order will continue to get filled as long as the market
does not move away from the trigger price.
Minimum Guaranteed Fills
Clients often ask, "How can I be sure my equity orders will be filled?" On
most exchanges, certain registered traders are responsible for maintaining
fair and orderly markets in their assigned stocks. One of their duties is
to guarantee an immediate fill for market orders and tradable limits up to
a specific size. The size of the Minimum Guaranteed Fill (MGF) varies with
a stock's liquidity.
Let's assume, for example, there is an MGF of 600 shares on the stock of
Apex Corporation. If you enter an order to sell 500 shares of Apex at the
current marked price, but only 200 shares are available at the price, the
registered trader for Apex will purchase the balance of 300 shares from you.
In order to take advantage of MGF's on most exchanges, you should place a
market order or tradable limit order.
Experience The TD Waterhouse Difference
Whether you are accustomed to trading equities, or a relative newcomer to
investing, TD Waterhouse gives you all the advantages of exceptional convenience
and accessibility. We offer a host of valuable resources to help you make
your own investment decisions, as well as experienced account representatives
who can facilitate your orders and trades quickly and accurately.
Service, selection and savings, backed by the security of The Toronto-Dominion
Bank ~ that's the TD Waterhouse difference. Contact TD Waterhouse today and put
that difference to work for you. And be sure to ask for a copy of our brand
new brochures on Foreign Equity Market Profiles and Commissions. It provides
a complete commission schedule, listed by market, as well as other valuable
information that will help you take the global advantage when trading in
foreign equities.
TD Waterhouse Offers Several Investment Alternatives In Precious Metals
While short-term fluctuations in precious metal prices continue to make
headlines, most analysts would agree that the real appeal of gold and silver
is their proven ability to act as a long-term store of value. More than any
other liquid assets, gold and silver have tended to retain their purchasing
power and provide an efficient hedge against "paper currency" inflation.
TD Waterhouse offers several investment alternatives for clients who want to
take a position in precious metals, but don't want to worry about the storage
costs and insurance against theft that are usually required when purchasing
gold or silver bullion:
- Underlying equity/stock targeting specific equities in the previous metals
sector enables you to profit form the price volatility of metals, as well
as the mining discoveries and developments that occur in this industry.
- Precious Metal Mutual Funds gives you the advantages of a professional manager's
expertise and the ability to diversify across a broad portfolio.
- Precious Metal Certificates through TD Waterhouse,
you can buy and sell gold and silver certificates in a way
very similar to, and just as convenient as, traditional stock
market trades. You may place either a market order or a limit
order for a precious metal certificate. (Orders below 500 oz. Gold
and 10,000 oz. Silver will be market orders only).
With the dual attraction of gold and silver, it is a small wonder that a
growing number of investors look to these precious metals as an integral
part of a well-balanced portfolio. To learn more about how you can invest
in precious metals, please contact your local TD Waterhouse office.
Invest With TD Waterhouse
Investing in mutual funds through TD Waterhouse offers many benefits:
- Reduced commissions on load funds.
- Access to many families of funds.
- Information from TD Waterhouse's mutual fund specialists on specific mutual
funds.
- Access to Mutual Fund Review, a quarterly newsletter packed with data on almost 500 mutual funds available through TD Waterhouse.
For more information, simply call your TD Waterhouse representative and ask
to speak to our Mutual Funds Centre at 1-800-461-3863.
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