Most public companies utilize as many exchanges as they can to list their public shares, mainly so they can access investors around the globe. Investors in the US using TD Ameritrade or E-Trade can trade stocks in Canada, so companies list on the Canadain Securities Exchange (CSE) where they can trade via the TD online portal called Think or Swim.
It’s easy to buy and sell stocks like CanaFarma Hemp Products (CSE:CNFA) using these online portals once you get the proper accreditations from your broker, and we are in a world of compressed commissions (zero in many cases) where the brokerage community just wants your assets for the AUM, or assets under management numbers. It allows retail investors to speculate, interday trade or build a long term portfolio using simple safe tools.
This is why TD Ameritrade was swallowed up by Charles Schwab. The world has become an asset under management (AUM) driven game, and few investors call a broker any longer, they spend time using a web-based platform and do their own due diligence. No one relies on a commission-based broker any longer unless they are over 80. We will see in the long run in this marriage was worth what Chuck Schwab paid, but the tea leaves say this consolidation was necessary. In a post-Covid-19 marketplace, all previous valuations are suspect.
We see stocks like CanaFarma Hemp Products listing on multiple exchanges, and the valuations settle in and volatility falls to manageable levels. When you launch trading on multiple exchanges you give market makers and brokers an opportunity to balance risk and bring markets inline using normal arbitrage as you see below. Keep in mind also these are new listings where the companies who venture out into the uncertain world of Covid-19 investing cycles already have proven revenue models, and are in sectors (like cannabis) that are in the early growth stage with the wind at their back.
It takes a solid plan to get the pieces in place to enable liquidity across global markets, but trade on multiple exchanges and continued and balanced liquidity seem to be supporting the CanaFarma valuation during these volatile markets.
- The U.S. Hemp market launched by farm Bill passage in December 2018
- Legalizes cultivation, processing, and sale of hemp-derived products across the states
- Eased banking and insurance regulations directed towards the industry participants
- 3,546 licenses have been issued
- Compound Annual Growth (CAGR) 2018-2022 is 18.4%