I remember this has come up in past discussion on this forum, but may account for some of the odd trading we have seen lately. Seems we are being held under the $1 - hope this can break higher soon. Cheers Topaz
Tuesday January 22, 2013, 4:30am PST
The question for individual investors is why HFT, which is typically employed on the major exchanges, is being used on a relatively small exchange like the TSX Venture.
The TSX Venture, however, has always been more of a retail exchange, said Mavridis, aimed at giving smaller companies access to capital markets. That makes it unsuited to high-speed tactics like these.
“Say a particular stock closes at $0.10,” he said. “The next morning at 9:26, just before the market opens, an algorithm places a bid for a huge number of shares at $0.09. A few minutes later, an offer appears from the same bank to sell the same amount of shares at the same price or slightly higher. That creates an artificial confusion in the market. People see these big orders, particularly when no news appears to be driving them, and wonder what’s going on. It freezes them up.”
“As well, because these orders are placed before the market opens,” he added, “they can get in ahead of individual investors.”
