RE:IIROC, the new CSIS - Fear of the unknownWhile I agree with your sentiment, I think you forgot to acknowledge the fact that the circuit breakers popped on Wednesday initially because the run up was faster than 10% in 5 minutes, and same for the ride down. I'm pretty sure these circuit breakers are for all stocks on the exchanges, not just pot stocks. But I could be wrong if the IIROC only implemented these for the pot sector after seeing the rise the last 3 months. And I believe for the most part since Wednesday, other than a few other times since, most moves have been outside the 5 minute window.
But I totally agree the circuit breakers f*cked the momentum and the runs.
MadeIn86 wrote: On Wednesday November 17th, someone at the IIROC decided that enough was enough.
The news of hundreds of percentage increases on shares of Licenced Cannabis producers had dominated the news.
Every cab driver and their mothers were shopping for vacations to Bora Bora on the backs of gains from CGC.
It was time to act now and fast.
IIROC issued a halt order and sent the share prices of all the LP's tumbling.
Within 4 minute of the halt order, IIROC issued a clearance to resume trading.
Upon resumption, the share prices of the LP's immediately began to recover losses from the just issued halt and investors shrugged of the perplexed action of IIROC.
IIROC immediately decided that something was amiss. Someone or something was not right with prices rebounding.
Over the course of the day 4 more halt trading orders were issued by IIROC , subsequent to each halt order the SP would immediately make attempts to recover lost gains only to be stopped dead on the tracks by another halt order by IIROC.
This continues until the fear set in enmasse paired with panic. Confidence and optimism died a quick death and investors took to their heels.
I am not an investment guru, professional trader or financial advisor but one thing is clear.
Since Wednesday the 17th nothing has been the same.
While I've read tons of arguments and opinions pieces on how much the SP should be, how high it could go, how fast it could get there, how slow the companies could grow, none of the inherent risks of investing in the budding cannabis industry ever included the danger of an independent body with so much power and without any obligation on transparency having such a drastic effect on the "free markets".
So here are a few thoughts I'd like those who can or understand to discuss.
1. When the trading halt order was issued, I was on the verge of making some fair gains in Mettrum which had released financial quarter results after market close the preceding day. CGC was on a roll hitting almost 18 - 20% gains in very short order upon market open.
Mettrum on the other hand was moving very very slow.
Just before the halt was issued Mettrum was up only 6%, and only just, as it had been fluctuating between 4 - 6% on market open. How and why were they candidates to have their trades halted with the "circuit breaker" rationale?
How much information is exchanged between IIROC and halted firms in 4 minutes which is the exact amount o ftime it took IIROC to issue a Trade resumption notice? What happened again within the hour to make IIROC rinse, dry and repeat halt orders and subsequent release in the same amount of time throughout the day?
2. Today and yesterday we've seen the share price of CGC and Mettrum decline 25% in vey short order...Does the so called "circuit Breaker" only apply to gains and not losses?
3. Who is IIROC protecting and what was the risk of letting the market ride out on self sustaining free market principles? We had seen CGC grow in similar fashion in the preceding weeks before but never had anyone thought for a second...gee I wonder if I should take my profits now, not because there might be some pull back on an overvalued company, but because IIROC might just issue a halt order 5 times in one day to kill the accelerating SP.
So we are to understand the cab driver or self employed professional who had just purchased 3K shares of CGC and MT or OGI was better off after the "protecting" actions of IIROC having lost 50% of their investment in very short order, not because of market sentiments, but due to a direct and conscious action of the Protectors?
4. What kind of investment scenario are we dealing with in the event that baby Trudeau comes out with a very fantastic and well received disclosure of the Task Force Report?
If said well received report spurs investors to pour into CGC, OGI, APH resulting in day gains of 25%?
Should one have a finger on the "Sell All" switch for fear of reprisal by IIROC?
On the other had if Baby Trudeau comes out with a horrible disclosure very much killing the hopes of country wide recreational dreams and investors take to their heels in droves? Will the Protector of the free markets "IIOC" come to the aid of investors with a Halt order?
Also, upon release of such halts are investors all going to take a chill pill and just sell little by little taking care to not trigger the "Circuit breakers"?
These are thoughts that have caused me headaches since Wednesday last week.
I'm so put off by the fact that no explanation has been given on actions that have severe impacts on individuals.
I think I’d be much at ease if IIROC released a statement reading like “ ISIS Day traders were manipulating the share prices through financial terrorism which forced them to act quickly and decisively” but forgive me for not buying this “circuit breaker” don’t ask don’t tell theory that has been selective in which fuse to pop.
I’ve spent enough time with Ontario Securities Commision and OSFI high level staff to know that a lot of these guys don’t fly straight. They all would like a vacation to Bora Bora too and by hook or crook they’ll get one as long as they are certain they won’t get caught.
Kindly forgive my ignorance if I used wrong terms or misunderstand certain things.
Do people like me a favour by enlightening us on items I’ve highlighted.
GOOD LUCK TO YOU ALL.