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ITRADE T-bill ask rate error?
June 9, 2023
10:04 am
kesa
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Could I ask Itrade users to check the ask rate on CAD Tbills when entering a trade order?

By my estimate, the quoted ask rate according to the price given is quite different than the derived yield generated by my calculation (using t+0 settlement) and the price given by Itrade.

eg, given Itrade price for a 3 mo CAD tbill, Itrade may show 4.7x% yield but the discount yield generated by my spreadsheet shows up as 4.5x%

Many thanks.

June 9, 2023
11:53 am
AltaRed
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Is the difference not the commission?

June 9, 2023
12:06 pm
kesa
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Screenshot-2023-06-09-at-3.02.23-PM.png

this is what’s shown to me, but I think it’s misleading.

by my calc, 69 day tbill with p=99.143 gives a yield of 4.57%

June 9, 2023
1:18 pm
AltaRed
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I have no further ideas.

June 9, 2023
1:30 pm
savemoresaveoften
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kesa said
Screenshot-2023-06-09-at-3.02.23-PM.png

this is what’s shown to me, but I think it’s misleading.

by my calc, 69 day tbill with p=99.143 gives a yield of 4.57%  

settlement is monday jun12. its 66 days not 69. 66 days will make the yield exactly 4.7804%.

June 9, 2023
4:47 pm
Norman1
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The estimated commission is $0.00!

Is that a glitch or is Scotia iTRADE actually waiving the commission on treasury bills?

Pretty good if one can place money in a 66-day Gov't of Canada treasury bill and get 4.78%.

Normally, the commission is $1 per $1,000, minimum $24.99. That would increase the price of the $10,000 order to

($9,914.30 + $24.99) / $10,000 * 100 = 99.3929

for a yield of

(100 - 99.3929) / 99.3929 * 365 / 66 = 3.378%

June 9, 2023
5:55 pm
kesa
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Whatever the settlement is the yield should be shown correctly as there is a significant difference.

In any event I think it is quite misleading.

The yields on t-bills from Itrade however are far superior than those from other online brokers, save IBKR.

June 9, 2023
7:10 pm
AltaRed
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It was just explained to you the yield is factual as stated. If you bought today, it does not 'close' and you do not own it until Monday, nor have to pay for it until Monday... as a T+1 settlement type (just like a money market fund, or a brokerage ISA, or a Cash ETF).

June 9, 2023
7:25 pm
Norman1
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Bond and money market transactions work differently than GIC transactions.

Scotia iTRADE's Bonds page explains the settlement of their fixed income products:

What is the settlement date for fixed income securities?

  • Canadian T-Bills and Commercial Paper: T+1
  • Government of Canada Bonds with an unexpired term of 3 years or less to maturity: T+2 
  • All other Bonds, including Strip Bonds: T+2
June 13, 2023
7:26 am
pwr1019
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It appears the real find here is the fact that Scotia iTrade is charging $0 to purchase T-Bills. Is anyone able to confirm that is a fact?

Do you have to do anything extra to be able to purchase T-Bills at Scotia iTrade? I have an old legacy account and I was in it this morning but under Fixed Income, Canadas .....T-Bills were not listed perhaps it requires an extra request/form/application?

June 14, 2023
4:18 am
Norman1
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Nothing extra is needed to purchase Government of Canada treasury bills.

The treasury bills are under Fixed Income as bonds issued by "CANADA, GOVERNMENT OF" with a coupon of 0.000%.

June 14, 2023
4:21 am
kesa
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For Itrade you can find CDA Tbills by selecting “fixed income”, then “money market”

June 16, 2023
7:41 am
pwr1019
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Thanks Kesa
I assumed they were under Issuer - Canadas, did not think to look for them in the Money Market category - appreciate the help

July 14, 2023
6:40 pm
Norman1
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pwr1019 said
It appears the real find here is the fact that Scotia iTrade is charging $0 to purchase T-Bills. Is anyone able to confirm that is a fact?

A friend called Scotia iTRADE and asked about the $0 estimated commission shown.

The explanation given was there is $0 commission on fixed income buy orders that are both (a) for $25,000 face value or less and (b) for items that mature in 89 days or earlier.

No official documentation of this. But, I placed an order for some bonds that met those two conditions. Estimated commission shown was $0.00. The order filled and the confirmation slip showed no commission charged. 🙂

The friend warned there may be a bug on the order entry screen. He had an order for bonds maturing a few days later than the 89 days. Order entry screen showed $0.00 estimated commisson. But, order was charged a commission on the confirmation slip.

Scotia iTRADE agreed to refund the commission charged in that case. If it should occur again, a screenshot would be helpful for opening a ticket to their IT department.

July 15, 2023
8:24 am
COIN
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I thought commission on T-bills were built into the asking price or was it changed to be explicit due to a regulatory rule change?

July 15, 2023
8:33 am
Norman1
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That depends on the investment dealer.

BMO InvestorLine includes its commission in the quoted price and yield. The embedded commission is revealed later in the order entry screens.

Scotia iTRADE does not include its commission in the quoted price and yield. The commission is added later in the order entry screens.

The regulatory change a while back was any commission had to be eventually revealed.

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