Stock price differentials

Zoomer | January 1st, 2006

Question: Could you please enlighten me as to why a stock such as the Toronto Dominion Bank (TD) trades on three different exchanges at three completely different prices.

For example, a recent was $42.21, $35.90 and $27.50 for the Toronto, Vancouver and U.S. exchanges respectively. I can’t see a distinction between the type of shares on the Toronto and Vancouver exchange quotes. – P.M.

Answer:

There may be small differences in the price of interlisted stocks, but nothing of the magnitude you describe. The Toronto-New York differential is obviously due to the exchange rate. As for Vancouver (actually CDNX), perhaps the quote you saw there was not a current one – that can happen if a stock hasn’t traded for a while. Remember, the number you are seeing is the last price paid. For a look at the current price range, check the bid/ask positions.

Also, make sure you’re comparing apples with apples. TD has several preferred shares that trade as well as the common stock. – G.P.