Only In Canada, Eh?

Previously, I had asked my broker about a particular transaction I had entered. Then, I heard something about the Alpha stock exchange on BNN. That led me to this article in the Globe and Mail. http://www.theglobeandmail.com/globe-investor/banks-face-probe-for-directing-stock-trades/article1694665/ . After doing more research I discovered we should not place a market order before trading begins. Never. Always use a limit order.

Some people will say, "Well, duh!?!" But what I don't think people realize is the opening price on the two exchanges, Alpha and TSX, are not the same. Again, not a huge surprise. In my case they were different by more than what I would have imagined. What I didn't know, is that we are not entitled to the best price between exchanges! For a market order, we get the opening price for whatever exchange our transaction is executed on.

Despite what I have managed to find out, nobody has explained to me how my transaction ends up on Alpha, or the TSX. Apparently, computers are to blame. Anyway, instead of submitting a market order, the advice I have been given is to enter a limit order. So here's the rub. If the price on the exchange which the transaction is being processed is outside the requested limit, nobody has guaranteed me that the order will be filled, even though the other exchange may have a price within the limit (unless of course, the price on the exchange which received the order comes back within the limit). I have no idea, either, how long it might take the two exchange prices to sync up during the day. Perhaps somebody reading this might have the answers.

If you want to get an Alpha quote, you can go to http://www.alphatradingsystems.ca/ and enter the ticker symbol. N.B. they are not real-time quotes.

Good luck!!