For example at the close of market today Apple was bid 153.30 and ask 153.35 which was a 5 cent spread. If you are a buyer or seller you likely can get somewhere around the mid of 153.32 or .33 meaning you will pay 2 to 3 cents. If you are buyer and you put in 153.30 you will not get filled unless the market moves down and if you are seller you will not get filled at 153.35 unless the market moves up.
Is this really a spread though? This is just a disagreement over the price in my opinion, no different than two ads on kijiji, one saying "Car wanted for $1000" and another saying "Car for sale for $1050". There is no true "price" just a guide as to what the last similar transaction happened at, and a buyer and seller waiting for the other to move.
Contrast this with a bank or those stupid currency exchange place who buys CAD/USD at like 1.30, but then sells at 1.40, while the true rate is 1.35. Some even have the gall to add transaction fees on top. On $200k with these ripoff artists you could easily approach over $10k in fees.
You can exchange currencies (for hedging or speculation) on interactive brokers very easily and with next to no transaction cost since developed market currencies are the most liquid market in the world. I'm sure you can do so with other brokers.
So you set up an account, and then presumably you'd have one in CAD, one in USD, one in EUR? Give them a check, wait for it to clear, do the exchange for $2, Then they just ship you a briefcase full of Euros? How exactly does that work?
I've read you can exchange foreign cash from your bank branch without much costs if you do it in advance, but have never done so myself
Are you sure about this bank thing? If that were the case you wouldn't see a post on redflagdeals every other day with people asking where the best place to exchange their $40 of USD is since it's taken for rote that you'll be paying 3-10% above the market rate.
With NG, you are not buying stocks. You are buying and selling DLR, the ETF that represents the DoLlaR
http://www.horizonsetfs.com/ETF/DLR
Why is there a MER here? Would this not impact your effective rate? And it doesn't *need* to be DLR, any interlisted stock is the same deal. But same as bitcoin or other cryptos, why the need for an intermediary at all? I want to directly change USD for CAD. Someone else wants to do the exact opposite. Why can't we do that quickly and efficiently at the market rate? Why the need for multiple transactions which although effectively does it, doesn't directly do it?
It just seems like a lot of extra hassles and workarounds for what others call "the most liquid market in the world". Realistically, I could put an ad on kijiji saying I have CAD looking to buy EUROs, at the prevailing market rate, and bypass all these middle men, phone calls, clearing periods, and journaling over to different exchanges. Or even do the same for stocks. But someone realized how notoriously inefficient that was, so they made digital exchanges. Apologies if this has turned into a bit of a rant....