Canadian exchanges, marketplaces, and the project brief

Five marketplaces

A marketplace is any facility that brings buyers and sellers of securities together. Canada's exam-relevant ones are five, and the question is always what trades where.

• Toronto Stock Exchange (TSX) — the senior equity exchange: established companies, the large miners, banks, energy and industrial names, and most Canadian ETFs. Owned by TMX Group.
• TSX Venture Exchange (TSXV) — TMX's junior board: early-stage and exploration companies that do not meet TSX listing standards. A company that grows can graduate to the TSX.
• Canadian Securities Exchange (CSE) — a separately owned stock exchange (operator CNSX Markets Inc.) recognised since 2004, listing micro-cap and emerging companies under streamlined requirements. Junior like the TSXV, but a different owner.
• Cboe Canada — a recognised stock exchange in its own right: the former NEO Exchange, Aequitas and the MATCHNow order book amalgamated as Cboe Canada Inc. on 1 January 2024. It lists companies and ETFs and, through its order books, trades TSX-listed securities as well — a large share of Canadian equity volume executes away from the listing exchange.
• Montréal Exchange (MX) — TMX's derivatives exchange: equity, index and interest-rate options and futures. Trades are cleared by CDCC. Equity options are American-style, 100 shares per contract.

Beyond these, pure alternative trading systems (Omega and Lynx, run by Tradelogiq; Liquidnet; and others) trade listed securities without listing any — Module 4 takes them apart.

Worked example — five instruments, five venues

A senior gold producer's common shares — TSX. A lithium explorer with no revenue yet — TSXV. A micro-cap software firm listed under streamlined rules — CSE. A retail order to buy 200 shares of a TSX-listed bank that a dealer's smart router fills on a Cboe Canada order book — Cboe Canada, though the listing is on the TSX. A call option on that bank — MX, cleared by CDCC. The one that trips learners is the fourth: the listing exchange and the executing marketplace need not be the same.

The project — 12 versus 12

The stock-tracking presentation is worth 20 % and starts now. The brief:

1. Pick 12 stocks you expect to rise over the term — any reasoning you like, documented.
2. Pick 12 stocks by a documented random method — for example, number the constituents of the S&P/TSX Composite in a column and draw with =INDEX(Tickers, RANDBETWEEN(1, COUNTA(Tickers))), recording the draws and re-drawing any duplicate.
3. Track both baskets weekly in a spreadsheet — price, weekly return, cumulative return — beside two benchmarks: the S&P/TSX Composite for the Canadian market and the S&P 500 for comparison.
4. Present in the final tutorial: which basket won, by how much, and what that says about whether stock-picking beats chance (Module 14 gives you the tools).

The random basket is the control. If you pick it by "stocks I've heard of", it is not random, and the experiment cannot tell skill from luck. Freeze the random draws on day one and keep the sheet that produced them.

Four more to place

An S&P/TSX 60 index futures contract — MX. A bank's preferred shares — TSX. A cannabis start-up under streamlined listing — CSE (or TSXV, depending on where it listed). A Canadian-listed ETF — TSX or Cboe Canada, both list them.