Toronto Stock Exchange

The Toronto Stock Exchange is very similar to the NASDAQ marketplace.  Since exchanging its doors and the trading floor for an electronic platform, the Toronto Stock Exchange or TSX has become the second largest electronic market in North America. TSX remains the exchange with the most oil and gas stocks in the world, and Canada's vast natural resources help with this statistic. Today, the TSX is the largest stock exchange in Canada and the third largest in North America behind the NASDAQ and New York Stock Exchange.

The Roots of the Toronto Stock Exchange

The Toronto Stock Exchange has its roots back in 1861 with 24 men gathering to make the exchange official.  In 1977, the exchange started the first electronic trading of less liquid securities. Since then, the exchange has undergone many changes, including closing the floor in 1997 to make it an electroni- only exchange. As an electronic exchange, quotes are processed faster and buying and selling is executed electronically to improve trading. Electronic exchanges generally have smaller spreads between bid and ask prices, as the market making is conducted by computers rather than human market makers. Traders favor electronic trading because it is more beneficial to them both in returns and in smaller fees.

Each Market has its Specialty

Every market is overweight in one particular sector due to geographical areas, the economy surrounding the stock market, and the various other influences and market factors that bring stocks to the market. Knowing that the Toronto Stock Exchange is overweight with oil stocks does play into the stock trader's strategy, as stocks are likely to boom with higher oil prices and fall with the same prices. Stock markets move together, and thousands of stocks generally all have the same market direction over time. Knowing how the Toronto Stock Exchange is weighted will help considerably when trading it.

Trading the TSX

Trading the TSX can be completed through a large number of online discount brokers. The TSX is as available to trade as any other stock market in the world. The hours for trading are from 9:30 Am to 4:00 PM, just as the New York Stock Exchange and NASDAQ all open and close at similar times. When these three markets are open simultaneously, they become the financial center of the world. After hours trading begins at 4:15 and continues until 5:00, although electronic markets commonly share price movements that exist for long after the close of the market. The market generally trades less than a billion shares per day, normally about 500 million to 700 million shares in active trading sessions. For this reason, the TSX is very liquid and remains a very important part of both the Canadian and world markets.

The TSX is a Great Alternative to NASDAQ and NYSE

The Toronto Stock Exchange is a great substitute for the NY Stock Exchange and the NASDAQ marketplace. For US traders who would enjoy a smaller market with more oil and gas stocks, the Toronto Stock Exchange is a new market with similar trading hours.