Skip to main content
Canada’s most-awarded newsroom for a reason
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
Canada’s most-awarded newsroom for a reason
$1.99
per week
for 24 weeks
// //

Small number of Nexen trades cancelled from Friday

AKHTAR SOOMRO/Reuters

Friday afternoon was a wild one for shareholders of Nexen Inc.

In just five minutes, the company's shares plummeted from about $25.20 down to around $21, only to shoot back up to $23.75. Trading was then halted for roughly four minutes.

Soon after, rumours started floating around that some of the trades would be cancelled, but no one was quite sure how much this would affect the afternoon's total activity.

Story continues below advertisement

Now that the dust has settled, it turns out that only about 200 trades have been cancelled, according to the Investment Industry Regulatory Organization of Canada, out of 56,174 Nexen trades executed that day. These trades were affected by a single stock circuit breaker halt, a new rule implemented after the Flash Crash of 2010.

In Canada, trading is halted when a company's share price falls by 10 per cent within a five-minute period. All trades executed at more than 5 per cent beyond the price that triggered the halt are cancelled, and in Nexen's case, these amounted to about 200 orders.

Looking back, Nexen's trading activity was especially wild just before the market closed because the shares moved in the wrong direction. Any investors who sold because they thought the deal would be blocked got a rude awakening about 90 minutes later. So what made them think this way? It's still a bit unclear, but one theory is that traders got spooked by the news that Prime Minister Stephen Harper would deliver a speech, convincing them that what he had to say would not be good. There's also a good chance that some sort of electronic algo trading accelerated the selling once the first few people got spooked.

Had the shares shot higher, there would be a serious need for an investigation into a possible leak. But just like the Potash Corp. of Saskatchewan Inc. decision, as well as the BCE-Astral ruling, the market had very little to trade on, other than best guesses.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies