Your Complete Guide to Buying US Stocks in Canada

For Canadians, the domestic stock market is a great place to begin investing. The TSX is full of high-quality, blue-chip, dividend-paying companies Canadians know and love. Buying Canadian stocks can be a good way to learn the ins-and-outs of how to buy stocks in Canada.

However, the Canadian stock market only comprises 3% of the world by market capitalization weight. Beyond Canada, thousands of international stocks offer broader diversification and growth potential.

Of particular interest is the U.S. stock market, which as of 2024 accounts for 60% of the world by market capitalization weight. This guide will teach you the ins-and-outs of buying U.S. stocks as a Canadian.

Can you buy US stocks in Canada?

Absolutely! Canadians are able to buy U.S. stocks using a variety of online brokerages the same way they buy Canadian stocks. Depending on your brokerage, the list of available U.S. stocks may differ. In general, U.S. stocks listed on well-known exchanges like the New York Stock Exchange (NYSE) or NASDAQ are available.

Other U.S. stocks, like penny stocks that list over the counter (OTC) may not be available on some Canadian brokerages. Some brokerages might impose liquidity and volume requirements, so thinly traded or unpopular U.S. stocks might not be available.

In general, if you’re trying to buy mid-to-large cap U.S. stocks, you shouldn’t have a problem finding them on Canadian brokerages.

Benefits of owning US stocks

Investing in U.S. stocks offers Canadian investors several advantages, particularly when it comes to diversification, sector exposure, and access to global growth opportunities.

1. Diversification Across Markets

The primary benefit of owning U.S. stocks is diversification. By expanding beyond Canadian borders, you reduce the risk of your portfolio underperforming during periods when Canadian stocks lag. The performance of the Toronto Stock Exchange (TSX) and the U.S.-based NASDAQ and NYSE often rotates. For example:

• From 2002 to 2009, Canadian stocks outperformed.
• From 2011 to 2021, U.S. markets—especially tech—led the way.

By owning both, you smooth out returns and avoid being overly reliant on the economic cycles of a single country.

2. Broader Sector Exposure

Canada’s stock market is highly concentrated in a few sectors, which increases sector-specific risk. In contrast, U.S. markets offer a more balanced and diverse sector allocation.

• Canada: Heavy in energy, financials, and industrials.
• U.S.: Greater exposure to technology, healthcare, and communication services.

Holding a proportion of U.S. stocks can help your portfolio when certain Canadian market-heavy sectors do poorly, like when the energy sector tanked during COVID-19 while the U.S. tech sector soared. Holding U.S. equities can provide a performance cushion during downturns in Canada’s dominant sectors.

3. Access to High-Growth Companies

Many of the world’s most innovative and profitable companies are based in the U.S. These firms have consistently driven market returns and represent major components of global equity indexes. Numerous U.S. stocks like Apple, Microsoft, Alphabet, Nvidia, and Amazon have led the world’s stock market indexes while continuing to post strong earnings.

Investing in U.S. stocks means gaining exposure to global leaders in technology and AI—some of the fastest-growing industries in the world.

4. Exposure to the Global Market Leader

As mentioned above, the U.S. stock market accounts for roughly 60% of the world’s investable market cap. Choosing not to invest in the U.S. means excluding the majority of the global equity opportunity set from your portfolio.

By owning U.S. stocks, you position yourself to benefit from:

• Global economic trends
• Market innovation
• The strength and stability of the world’s largest capital market

Risks of trading US stocks

The U.S. stock market is very transparent and regulated compared with those in many other countries. Like in Canada, publicly traded U.S. companies on large exchanges must file periodical financial statements and disclosures.

The biggest risk with trading U.S. stocks is actually foreign exchange risk. Because U.S. stocks trade in USD, Canadian investors need to convert CAD over. In doing so, they can incur high fees with some brokerages, anywhere from 1% to 2.5% in some cases.

Moreover, if you hold U.S. stocks and the CAD suddenly appreciates, you’ve lost value. If you sell for USD and convert back to CAD, you could be left with a loss given that the CAD is now worth more than when you first exchanged it.

Canadians can mitigate some of these risks by investing in CAD-denominated exchange-traded funds (ETFs) that hold U.S. stocks, or by buying Canadian Depository Receipts (CDRs). Using a brokerage that offers zero-spread CAD-USD conversions is also a good idea.

How to buy US stocks in Canada

If you’ve decided to buy U.S. stocks in Canada without using a Canadian-listed ETF or CDR, the following steps will help you get started.

1. Open a brokerage account and fund it

The first step is to open an account with one of Canada’s many online brokerage platforms. There are many options out there, so make sure you pick the one with the best combination of features you’re looking for. Some of these brokerages offer zero-commission trading, or low conversion fees for U.S. dollars. After you’ve opened your account, connect a bank account to fund it.

Good for: All-around great platform and features for beginners and experts alike

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Trading Commission	$8.75
Account Maintenance Fee	$25/quarter Waived if: it is less than one quarter since account opening, you have $25,000 or more in assets, completed 2 commissioned trades in the last quarter, completed 8 commissioned trades in the last 12 months, set up a $100/mo recurring deposit, qualify for the Young Investor offer.

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• Trading Commission: $8.75
• Account Maintenance Fee: $25/quarter
  Waived if: it is less than one quarter since account opening, you have $25,000 or more in assets, completed 2 commissioned trades in the last quarter, completed 8 commissioned trades in the last 12 months, set up a $100/mo recurring deposit, qualify for the Young Investor offer.

• Get up to $150 cashback when you open and fund a new account. Use promo code PROMO2025. Offer expires October 31, 2025.
• Receive up to $150 + tax when the client transfers in $15,000 or more (can be combined with cashback offer).

Depending on the brokerage, you could open a taxable account, Tax-Free Savings Account (TFSA), Registered Retirement Savings Plan (RRSP), Locked-In Retirement Account (LIRA), or Registered Education Savings Plan (RESP).

2. Convert CAD to USD

The next step is to convert your CAD to USD. Your brokerage should have a currency conversion option. Pay attention to the “spread”, or the difference between the spot foreign exchange rate and your brokerage’s in-house rate.

For example, if $1.00 in CAD can buy $0.75 USD at the spot rate, but your brokerage is only offering you $0.70, they’re making a profit off the spread. You may also be charged an additional commission per transaction. To minimize this, select your brokerage carefully.

3. Buy your favourite U.S. stocks

Once you have a USD balance in your account, you can search for U.S. stocks using their ticker name. For example, if I wanted to purchase shares of Apple, I would search “AAPL”.

From there, you can indicate how many shares you want and then place an order. Your order can be placed as either a market order (immediately fills your order at the best available price) or a limit order (which only fills your order at the price you specify).

Here is a comparison chart of Canadian brokerages where you can buy US stocks

Canadian tax implications of buying U.S. stocks

The Internal Revenue Service (IRS) imposes a 15% foreign withholding tax on dividends from U.S. stocks. For example, suppose you held a U.S. stock that paid a 5% annual dividend yield. After the 15% foreign withholding tax, that dividend yield would be reduced to 4.25%.

There are three ways to avoid this tax:

1. Hold the U.S. stock in your RRSP, where it is exempt from foreign withholding tax.
2. Hold the U.S. stock in your taxable account, where you can avoid double taxation on dividends by claiming a foreign tax credit.
3. Buy U.S. stocks that don’t currently pay dividends, like Berkshire Hathaway and most tech stocks.

Aside from this, you’re subject to the usual CRA rules for capital gains/losses if you sell for a profit/loss in a non-registered account.

Should you buy US stocks in Canada?

The answer to this question depends on your risk tolerance and investment objectives. Passive investors might be alright just buying a Canadian-listed ETF that tracks a U.S. stock market index, such as the S&P 500 or NASDAQ 100. These investors don’t like to actively invest by picking stocks, so a U.S. stock index fund will do. Investors who opt for this approach won’t need to exchange CAD for USD.

However, if you want to try stock picking for a chance at beating the market, then buying U.S. stocks could be a good idea. By buying U.S. stocks, you gain exposure to some notable companies that see heavy price action around earnings reports and economic releases. Many historically outperforming stocks have come from the U.S. market.

Online brokerage services are offered through Qtrade Direct Investing, a division of Credential Qtrade Securities Inc. Qtrade, Qtrade Direct Investing, and Write Your Own Future are trade names and/or trademarks of Aviso Wealth Inc.