The TSX is home to over 1,500 stocks, including some of the world’s largest companies. Some of the most well-known Canadian stocks that are listed on the TSX include Royal Bank of Canada (RY), Bank of Nova Scotia (BNS), and CIBC. Other companies that are listed on the TSX include The Toronto-Dominion Bank (TD), TransCanada Corporation, Shell Canada Limited, Telus Corporation, Fortis Inc., Agrium, Canadian Natural Resources Limited (CNRL), and Thomson Reuters Corporation (TRI).
Advantages of Trading on the TSX
The TSX offers several advantages, such as:
Offers access to well-known international companies and Canadian blue-chip stocks. Some of these can be accessed through ETFs or other investment products without having to pay additional commission fees. That means you don’t have to worry about your trade orders getting filled at a worse price than you expected.
The TSX is a liquid market, meaning that it has high trading volume and low spreads. This makes it easier to buy and sell stocks at the desired price.
Has a well-developed infrastructure, including an efficient order execution system.
Is a regulated exchange, which means that companies have been vetted before being allowed to list.
Offers a unique product line, including Junior Capital Pool Companies (JPC), Preferred Shares, and Real Estate Investment Trusts (REIT). All of these can be traded on TSX’s platform.
Disadvantages of Trading on the TSX
It’s more expensive to trade stocks listed on the TSX than those listed on other Canadian exchanges, such as the NEO. That’s because each stock has its commission rate associated with it and it can be quite high. For example, CIBC trades at $34.00 per share, so a buy order of 100 shares will cost $3,400 (plus trading fees and taxes).
The bid-ask spread is also wider on the TSX than it is at other exchanges. That’s because there can be a wider gap between what investors are willing to pay for a company and what investors are willing to sell it for. For example, if an investor wants to buy RY at $62 per share, they might be able to find it on the NEO or another exchange for that price. However, on the TSX it’s likely going to cost more because there are often many sellers trying to get rid of their shares at a lower price.
The TSX is also not as transparent as some of the other exchanges. For example, it doesn’t have a real-time stock ticker that updates investors on the latest prices.
The Bottom Line
The TSX is a well-established and regulated stock exchange that offers access to some of the world’s largest companies. However, it can be more expensive to trade stocks on the TSX than at other exchanges. Additionally, the bid-ask spread is wider, and the exchange is less transparent.