Wealthsimple launches margin trading

By Swapnil Parikh, VP of Product

Wealthsimple has spent the last several years unlocking access to sophisticated investing products like private equity and venture capital so that Canadians everywhere, not just the ultra-wealthy, can benefit. Today marks a new high-point in that mission, and one I’m especially proud of: Wealthsimple is excited to announce that eligible clients will now be able to trade on margin. 

Margin is the next step in Wealthsimple’s sophisticated trading strategy. We suspected margin accounts would be popular among those who asked for it, but we’ve been bowled over by the response — it's one of our largest waitlists ever. And eligible clients have already accrued over $40 million in margin balances.

By allowing clients to borrow funds against their existing portfolio, margin trading unlocks greater trading power — and with it, greater potential returns. In 2024, Canadians were trading on margin to the tune of $38B, a 50% increase in less than 4 years. 

And so, faced with demand for a traditionally “exclusive” product, we did what we always do: combined technology, financial expertise, and a small mountain of paperwork to bring hassle-free margin trading to a broader set of Canadians. We also made it more affordable, offering lower interest rates than any Canadian bank — sometimes even 1% to 2% lower, which can save clients thousands of dollars over time — and dispensed with the usual “exposure” or “maintenance” fees that some brokerages like to charge. Not only is this way more simple and transparent, but without all those hidden fees, a client’s gains stays their gains.

Margin trading is not without risk, however. That’s why we were intentional in how we designed our product and in just how much we could lower the usual bar to entry without introducing additional risk. Through beta testing and user feedback, we devised a quick-yet-rigorous approval process to get eligible clients up and running, with no physical paperwork or branch visits required. We also built in a margin health tracker, which gives them a clear and constant gauge of their account’s risk level. It updates daily, and if an investor were to approach the red zone before a margin call, we send them clear next steps on what to do. This may seem like a small feature, but it makes our margin experience more transparent and intuitive.

And there’s more to come. Throughout February, we'll roll out new educational materials that are shared with clients when they sign up (similar to what we do for options trading). That’s on top of our current series of guides on topics like margin, margin calls, and margin vs. cash accounts. As important as it is to us to give investors access to margin, it's even more important that those investors have a good understanding of how it works. 

Margin trading has been a top ask from our clients, and for good reason. It’s yet another sign that Canadians are increasingly savvy when it comes to growing their wealth — to going beyond stocks and bonds and building a diversified, mature, strategic investing portfolio. 

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What is margin trading? 

Margin trading is an investment strategy that lets you borrow funds against your existing portfolio to multiply your purchasing power, allowing you to make larger trades and reap greater potential returns (although be warned: losses are amplified, too). For investors willing to take on extra risk, it can be an incredibly powerful tool. You can learn more about how margin trading works and review our rates here.