Category Archives: InvestorLine

How to Place an Order to Buy Shares of Stock in a Company with BMO InvestorLine

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Once you have a self-directed investing account with BMO InvestorLine you can buy shares of the stock of publicly traded companies such as those listed on the Toronto Stock Exchange. You will need to have enough money in the cash part of your account to pay for the shares plus to pay the trading costs. When in doubt, either limit the amount you are willing to pay per share or reduce the number of shares you are buying to ensure you will have enough cash in your account to cover both costs. There are various ways to limit or control your purchase order with InvestorLine and this article will describe some of them.

First, you may want to review the suggestions in How to Get Ready to Buy Shares of Stock in a Company.

Before trading, you should know:

  • How many shares you want to purchase
  • Whether you want to buy all of your shares at once, or in batches over several months
  • What is the maximum price you will pay per share
  • Whether you will risk the price going up above what you expect to pay
  • Whether you will risk paying “too much” if the price drops after you set a fixed price at which to buy
  • What it costs you to execute a trade
  • That you have or will have the cash to settle the trade in your account at the required time
  • Whether you will get paid the next dividend or not, if applicable
  • What the price history has been for the stock

How to Place an Equity Buy Order with BMO InvestorLine

  1. Go to BMO InvestorLine at: https://www.bmoinvestorline.com/
  2. To sign in to your BMO InvestorLine account/s:
    1. In the User ID or Account # field, type your account number or if you have grouped your accounts under one User ID, type your User ID.
    2. In the Password field, type your password.
    3. Click on the Go button.
  3. From the drop-down list on the right side of the screen, select which account you wish to make the purchase in.
    For example, I selected my RRSP account.
  4. Under the Trading tab, select Equities.
    The Type will already have Equity selected, which is what we want today.
    You could also select Option from the drop-down list if you have an Options account: don’t.

Check the Current (Real Time) Price for an Equity Using BMO InvestorLine

  1. In the Symbol field, type the trading symbol for the company you are interested in.
    For example, I typed: BNS
  2. Press the Enter key.
  3. On the right side of the screen, a small chart will display the current price and how much it is up or down since the open price.
    It will give the hour and minute of the last trade. (But not, unfortunately, the second)
    It will list

    • the Bid and Ask prices
    • the Bid and Ask Lots
    • the High and Low for the day, and
    • the Volume
  4. You can update the price by clicking on the Refresh Quote link.
    You have to keep clicking it if you want to see the most recent price.
    For an actively traded stock like BNS, the price can flip around significantly several times a minute.
  5. There are no “streaming” or automatically updated real-time quotes available at the regular trading level of account. (If you have a LOT of money at InvestorLine you may be upgraded to a higher level of service including streaming quotes. I doubt I will ever be at that level.)
  6. Even though it only reports the Last Trade time to the nearest minute, you can get several quotes during that same minute by clicking on the Refresh Quote button.
  7. If you’re curious, you can click the tabs on this small chart to also see
    • Your account balance
    • Your order status
    • Charts (This will take you out of the Equity and Option Order Entry screen and back to the Quotes screen we looked at earlier.)
    • Help (This brings out a pop-up window of quick information about placing orders. It’s worth reading at least once.)

If you still want to place your Buy Order you can continue with these steps.

How to Submit a Buy Order for Shares Using BMO InvestorLine

  1. With the Type set to Equity
    From the Action drop-down list select Buy.
  2. From the Market drop-down list select Canadian or US.
  3. In the Symbol field, type the trading symbol for the company of interest.
  4. On the chart on the right side of the screen click Refresh Quote.
  5. In the Quantity field, type the number of shares you wish to buy.
    The system will update the right side of the screen with an estimate of the cost to buy the shares with the commission at the current Market Price.
    NOTE: The Market Price is changing every second. Your total cost may go up or down!
    Make sure you will have enough cash to pay for the shares PLUS the trading commission.
  6. CONSIDER whether you want to buy at the Market Price.
    Personally I never do. I always enter a price limit. Yes, sometimes this means I pay too much for a stock, if the price drops after I set my order. However I have never had to pay more than I expected for a stock.
  7. From the Trade Price drop-down list select either
    • Market Price
      To take a chance and pay what the stock is trading for at the second your trade is executed; or
    • Price Limit:
      To state exactly what price you are willing to pay.

      • Note: If the stock starts to fall in value, your trade will definitely get filled on the way down and you may pay more than other people for the stock.
      • Also, if you set a price limit that is too low, no one will sell you the stock and your order will not fill. (You will not be charged a commission if your order does not fill.) So I could put in a buy order for BNS at $5, but aside from some sort of computer system error, I would not expect it to fill!
  8. From the drop-down list, select the appropriate Settlement Funds: Canadian Dollar or US Dollar.
  9. In the Good Until field, if applicable, select the last day for which this order will be in place. For example, you can select Today Only, or you can select up to 19 business days later.
  10. In the Contact Information field, type the telephone number at which you can be reached by the broker.
  11. If applicable, in the Extension field, type your telephone extension number.
  12. Check out the summary of your request in the Review & Submit Order box.
    If they look acceptable, in the Enter Your Password box, type your trading password.
  13. To place the order, click on the Submit Order button.
  14. If you place a ridiculously low price to buy, you may get the error message:
    Your order was not processed. The following problem is associated with your order:
    Warning: The limit price you have specified is too far off the market. Your order may not be accepted. (11060)
    You may continue with your order or may choose to change/cancel the order.
    It was actually a bit reassuring to know it wouldn’t accept an order to buy BNS at $1 a share!
  15. If you submitted a more reasonable order, the Order Confirmation screen will be displayed.
  16. You may wish to copy and paste this Order Confirmation into a document and save it for reference.

You’re done!

To Review Your Order

(For more detailed information, please also see Reviewing Your Orders for a BMO InvestorLine Account.)

  1. From the Trading tab, select Order Status.
  2. A list of your orders is displayed. You can see quickly if the order is open, filled or expired.
    To review the details of an order, such as the price limit, click on the Original Order Number in the list.

Securely End Your Session

  1. If you have finished using BMO InvestorLine, click on the Sign Out link.
  2. For increased security, close your browser session.

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Do you have any tips for investors placing orders to purchase shares using BMO InvestorLine? Please share your experiences with a comment.

Review the Dividend Yield, Timing and Ex-Dividend Date for Shares of a Company’s Stock Using BMO InvestorLine

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There are advantages to buying stocks that pay a dividend monthly, four times a year or annually. One sometimes overlooked benefit is that it may increase your willpower to stick with a good stock even if its price is driven down temporarily. If you do plan to buy a dividend-paying stock, you may want to check on the yield, payment frequency and ex-dividend date before you place your order to purchase. Here’s how you can use your BMO InvestorLine account to get the facts.

How to Check the Dividend Yield, Timing and Ex-Dividend Date to See if You Will Get Paid the Next Dividend

  1. Go to BMO InvestorLine at: https://www.bmoinvestorline.com/
  2. To sign in to your BMO InvestorLine account/s:
    1. In the User ID or Account # field, type your account number or if you have grouped your accounts under one User ID, type your User ID.
    2. In the Password field, type your password.
    3. Click on the Go button.
  3. Click on the Quotes & Tools tab.
  4. In the Symbol field, type the stock exchange code for the company you are interested in.
    For example, I typed SU for Suncor.
  5. Click on the Go button.
  6. In the facts box, on the right hand side, it should list:
    • Indicated Annual Dividend
    • Dividend Yield
    • Ex-Dividend Date
    • Dividend Frequency
  7. When you are finished reviewing the dividend information, click on the Sign Out link.
  8. For increased security, close your browser session.

Remember Dividends are NOT Guaranteed! More Research may be Needed

You may see an amazing dividend offered. Perhaps the stock is paying an Indicated Annual Dividend of $2 and the share price is $10. Sounds too good to be true! It likely is. Companies can change their dividend payment at any time, with no warning, and can cancel dividend payments with no forewarning. Buying a dividend-paying stock is NOT like buying a GIC or term deposit.

For companies that have been paying dividends steadily for many years, the indicated annual dividend is fairly easy for InvestorLine to find and report. Some companies, however, only pay dividends once in a while. Their dividend may still be reported by InvestorLine as if it is an established fact. BE CAREFUL!

If the dividend is an important part of your decision to buy a stock, visit that company’s own website. Look for their Investor Relations information. Find their Dividend History information. Check whether they have been paying dividends steadily. Check whether the amount of the dividend payment is consistent or wildly different.

For example, CWL is an executive recruitment agency (and other things.) On the BMO InvestorLine Quotes+ screen, today, it says for CWL

  • Indicated Annual Dividend: 0.06
  • Dividend Yield 7.143
  • Ex-Dividend Date Apr 18
  • Dividend Frequency Quarterly

Sounds good, right?

Now go to the Caldwell Partners website, Investor Relations page.
Surprisingly, there is no dividend history information tabulated. This should sound a warning bell.

If you look through the annual reports, you will see that in some years they did not pay a dividend.

Next, off to Morningstar to see what they report. They state the Dividend in 2008 was 0.06, but in 2009, 2010 and 2011 it was 0! This is not a reliable steady dividend. Something to consider before buying shares in the company.

Dividend Yields Can be Misleading

Be careful of the Dividend Yield, as well. It looks like an interest rate, but it’s not. If the price of a share goes up, the dividend yield goes down. If the price sinks, the yield grows. So what you see reported is not necessarily what you would get. What you get depends what price you pay at the instant your order is filled. If you are only interested in a stock if the yield is, say, 3% or higher, you may have to put in a limit order to restrict the maximum price you are willing to pay per share.

Also remember that high yields are not normal. If the yield is very high, the company may decide to cut the dividend in the future. Ask yourself whether you think the company can sustain paying such a high dividend if its stock value is so low.

Also remember that for some shares, there is often a dip in price both the first trading day after the stock goes Ex-dividend and the day the dividend is paid. You may want to defer your purchase to one of those days, although market conditions could eliminate any dip with no warning.

When Should You Buy to Still Get the Next Dividend?

If it’s of interest, check the Ex-dividend date. You must have your purchase request filled BEFORE this date to receive the next dividend. So if it is May 29 and the Ex-Dividend date is May 29, it’s already too late to get the next dividend payment.

Note: The actual dividend payment date is not reported on this screen. It’s not unusual for dividends to be paid one month or even two months after the ex-dividend date. If the payment date matters to you, read the press releases for the company, or go to the company’s website and check under Investor Relations.

The Dividend Frequency Can Be Useful

If you are trying to create an income-generating portfolio, you may be quite interested in the Dividend Frequency information. A company that only pays one annual dividend may be less desirable to you than one that pays a monthly dividend.

Conclusions
It’s unlikely that you will buy a stock solely based on its dividend. The dividend, though, can be an important piece of the puzzle of picking between two or three interesting stocks. The BMO InvestorLine Quotes+ information is a good starting place for comparison, but remember to check for more details on a business’s own website to get the entire picture.

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If you’re considering buying a dividend-paying stock what do you consider? Please share your experiences with a comment.