Jeff Foster, CEO and founder of CIX Trading, in December, 2025. CIX recently launched a new Canadian trading platform that allows investors to buy and sell domestic stocks from 8 a.m. to 5 p.m. ET.Cole Burston/The Globe and Mail
As Canadian stock trading opens up beyond the traditional 6½-hour day, the country’s investment regulator is warning investors that buying and selling stocks outside regular market hours can come with additional risks.
The Canadian Investment Regulatory Organization, or CIRO, issued guidance Thursday for investment dealers on extended-hours trading, and a notice for investors that they may encounter lower trading volumes, wider gaps between buying and selling prices, and greater price volatility outside regular hours. CIRO is a self-regulatory organization that oversees all investment dealers and mutual fund dealers.
The guidance comes shortly after CIX Trading Inc. launched a new Canadian trading platform that allows investors to buy and sell domestic stocks from 8 a.m. to 5 p.m. ET. CIX plans to expand those hours to 7 a.m. to 8 p.m. ET later this year and eventually offer trading 23 hours a day from Monday to Friday. Stocks currently trade on Canadian exchanges between 9:30 a.m. and 4 p.m. ET each weekday.
Canada gets extended hours for stock trading
Kevin McCoy, senior vice-president of market regulation at CIRO, said he expects uptake in the early days of extended-hours trading to be “quite muted,” but that it could become more mainstream.
During regular trading hours, all Canadian equity marketplaces are open at the same time. Outside those hours, fewer marketplaces and investors may be active, meaning there can be fewer buyers and sellers for a particular security, Mr. McCoy said.
That can reduce liquidity and widen the bid-ask spread, the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept. Mr. McCoy said that investors may receive a less favourable price than they would during regular trading hours.
Investors may also see bigger price swings during extended hours, especially during company earnings, economic reports or breaking-news events when fewer investors are trading.
Investors using market orders during extended-trading hours, which generally execute at the best price available at the time the order reaches the market, may also encounter issues. Mr. McCoy said they could end up with a price that they didn’t want because of the wider bid-ask spread.
Mr. McCoy said that instead of a market order, investors trading in extended hours could use limit orders, which allow them to specify the maximum or minimum price at which they are willing to buy or sell. While the trade may not be completed if that price is unavailable, the order gives investors more control over the price at which their trade is executed, he said.
Competition intensifies among stock trading platforms
Extended-hours trading may not make sense for every investor, Mr. McCoy said. Longer-term investors, for example, may have less reason to react immediately to developments outside regular trading hours, while other investors may value the flexibility to trade following an earnings announcement or other market-moving events.
The introduction of longer trading hours does not come with a separate regulatory regime, Mr. McCoy said. Investment dealers will be subject to the same CIRO rules, marketplace rules and securities laws during extended-trading sessions as they do during regular trading hours.
The push toward longer trading hours is not limited to Canada. The London Stock Exchange Group announced in July that it plans to launch LSE 24, which would eventually allow near-continuous trading of London-listed securities from Monday to Friday.