Can Anyone explain how listing on Canada NEO exchange helps with 5 cent bid/ask spread

Discussion in 'Trading' started by vanv0029, Dec 23, 2017.

  1. vanv0029


    An out patient hospital company in Houston area just released this PR. HLTH is going to list on the Canadian NEO exchange I think to avoid a situation where its low priced $1.35 stock never moves.

    Here is the PR:

    I think NEO exchange is similar to the IEX exchange that uses a delay loop.

    HLTH shows up on many value investor screens because share price is way below book and is sells at less than one times sales. It is not popular on Wall Street I think because it uses a different model for it ASC hospitals that makes it popular with surgeons. Namely, it does not hire physicians but pays their professional fees.

    I think HFTs have figured out how to use the 5 cent bid ask spread to keep the share price from moving. Price has stayed between $1.30 and $1.35 for months with volume of about 300k shares per day. There seems to be some sort of clock program active so there is a small trade every one minute or so always during the day.

    How does listing on the NEO exchange make a difference?

    Someone on a message board asked the question this way:

    "The part I don't get is how the minute by minute arbitrage will balance out, and will it prevent them from running this loop or box strategy somehow?"