The Toronto Stock Exchanges Hot-Boil issue could have big implications for Canadian investors.
In its latest update, the exchange says the issue affects roughly one per cent of the trading volume, or $13 million.
That’s a small fraction of what it’s reported on average in a year, but it’s significant for a trading market that has long struggled with volatile stock prices.
And it’s likely to be even smaller in some sectors, as the market is likely to stay volatile.
The hot-burning issue has already made some companies reluctant to trade on the exchange, while some have also reduced their exposure to it.
The issue affects about 100 companies on the TSX and its exchange-traded funds, which provide a broad range of investment options to investors.
The TSX has been trading at a discount since it began trading on Feb. 9.
In addition to trading on the Toronto stock exchange, some Canadian and foreign companies also buy and sell shares on its electronic platform.
On Feb. 19, a U.S. company called Ocotvaz agreed to buy the Toronto-based exchange-listed stock of the U.K.-based trading platform BitStamp.
The deal was reported in the Wall Street Journal, but there were no further details.
At the time, the price of the BitStamps share was trading at $2.30, down more than $1, and Ocotovaz declined to comment.
The new issue also could affect some companies that have long been using the TSx as a hub to market their goods and services.
That includes major tech companies like Google, Facebook and Twitter, which rely heavily on the stock market for revenue and profit.
But there are many other companies that don’t rely on the trading floor for their revenue or profits, such as hospitals and universities, which often rely on foreign exchanges for their revenues and profits.
The market is also vulnerable to price movements, particularly in emerging markets.
Some investors, such like the UBS Global Equity ETF, are already concerned about this hot-burn issue, which has become so intense that it has created a “hot” market in the index.
On Thursday, a large portion of the TSxxX closed at $3.00 a share, which is below the record low of $4.03 that it set on Jan. 17.
“It’s a very, very hot market,” said Mark Pomerantz, chief market strategist at UBS.
“We’re in a market that’s a bit more volatile than we normally see in the U