24 Hour Trading Disclosure

Wealthsimple Investments Inc. (“WSII”) is a registered investment dealer and member of the Canadian Investment Regulatory Organization (“CIRO”). WSII offers 24 hour trading for U.S.-listed stocks and exchange-traded funds (“ETFs”). This disclosure is intended to be supplementary to our Best Execution and Order Handling Disclosure, and outlines some considerations you should be aware of when trading outside of regular trading hours.

24 hour trading refers to the buying and selling of securities during and outside regular trading hours (9:30 am - 4:00 pm Eastern Time, or “ET”). WSII clients can buy and sell U.S.-listed stocks and ETFs 24 hours a day, 5 days a week from Sunday 8:00 pm ET- Friday 8:00 pm ET. 

There may be early closure of stock markets on trading days before or after the holidays. Trading sessions will be adjusted in accordance to the shortened market hours. 

Risks and Considerations for Trading Outside Regular Market Hours (Extended  Hours Trading)

It is important to understand the risks and considerations associated with trading outside regular market hours which is referred to as extended hours trading for the remainder of this disclosure. There are three trading sessions in the extended trading hours at WS: pre-market hours (4:00 am- 7:00 am ET), post-market hours (4:00 pm to 8:00 pm ET), and overnight hours (8:00 pm- 4:00 am ET).:

Lower Liquidity

Liquidity refers to the ability of market participants to buy and sell stocks and ETFs. Generally, the more orders that are available in a market, the greater the liquidity. Liquidity is important because with greater liquidity it is easier for investors to buy or sell stocks and ETFs, and as a result, investors are more likely to pay or receive a competitive price for stocks and ETFs purchased or sold. There may be lower liquidity in extended hours trading as compared to regular trading hours. As a result, your order may only be partially executed during the extended trading session, or not at all.

Higher Volatility

Volatility refers to the changes in price that stocks and ETFs undergo when trading. Generally, the higher the volatility of a stock or ETF, the greater its price moves over a short period of time. There may be greater volatility in extended hours trading than in regular trading hours. This can be especially true with ETFs. As a result, your order may only be partially executed, or not at all, or you may receive different execution prices when engaging in extended  hours trading than you would during regular trading hours.

Changing Prices

The prices of stocks and ETFs traded in extended t hours trading may not reflect the prices either at the end of regular trading hours, or upon the opening the next morning. As a result, you may receive a different execution price when engaging in extended hours trading than you would during regular trading hours.

Unlinked Markets

The prices displayed on the WS extended hours trading system may not reflect the prices in other concurrently operating extended hours trading systems dealing in the same securities. Accordingly, your order may get filled at the limit price even if the security trades at a better price in other extended hours trading systems.

Risk of News Announcements

Normally, companies (or issuers) make news announcements that may affect the price of their stock after regular trading hours. Similarly, important financial information is frequently announced outside of regular trading hours. These announcements may occur during extended hours trading which may cause an exaggerated and unsustainable effect on the price of a security if combined with lower liquidity and higher volatility.

Trading Halts

A trading halt may be imposed by a stock exchange or a regulatory body to allow a company to announce important news or when there is a significant order imbalance between buyers and sellers in a security. Pending orders for a security on halt may be canceled but won’t be processed until trading resumes.

Wider Spreads

The spread refers to the difference in price between what you can buy a stock or ETFs for and what you can sell it for. Lower liquidity and higher volatility in extended hours trading may result in wider than normal spreads for a particular stock or ETF.

Communication Delays or Failures

Delays or failures in communications due to a high volume of orders or technical issues may cause delays in or prevent the execution of your order. Any communication or computer problems experienced by WSII, its executing broker, or participating ECN or exchange, may prevent or delay the order from being executed/ canceled and/or fill reported back to the client. WSII reserves the right to temporarily or permanently close an extended hours trading session without prior notification in the event of system failures or unforeseen emergencies. WSII will not be held liable for missed executions/cancellations or delay in reporting fill messages back to the client in the case of a system failure or cessation of extended hours trading.

Duplicate Orders

There is a risk of duplicate orders if you place an order for the same security in all trading sessions , even if that order is a day order. You may not receive confirmation of your executed orders from a trading session until the next trading session has begun.

Additional Risks and Considerations for Overnight Trading 

It is important to note that the risks outlined above are greater when trading during overnight hours (8:00 pm ET- 4:00 am ET).    

WSII executes overnight trading orders on an agency basis through Blue Ocean Alternative Trading Systems (BOATS). BOAT is not required to display prices publicly and may have very limited liquidity and/or high volatility. Orders placed during overnight trading hours may not be price protected and may be executed at prices that are worse than prices available at other execution venues.

BOATS employs a 20% price band during its trading session. Overnight trade orders entered during any trading session that are priced at more than 20% away from the reference price for a security may be rejected. The reference price BOATS uses is the last sale price for each security on a centralized stock exchange as of 7:30 pm ET. However, to limit the occurrence of order rejection for orders submitted prior to 7:30 pm ET, WSII and/ or our executing broker(s) may implement a more conservative price band.

In addition to the 20% risk check, BOATS also employs single order share size and notional value checks on each order.

Extended Hours Trading through WSII

You should also be aware of the following considerations when submitting orders to trade in the extended hours sessions through WSII:

Platform Support: Limited client support is available during extended hour sessions. While we have controls in place to monitor for any system errors, our team may not be readily available to assist if you encounter issues with specific orders. 

For overnight hours trading, there will be no platform support from the WS team.

Order Cancellation/ Rejection: WSII’s order management system is configured to automatically route the majority of client orders directly to WSII’s executing brokers for execution. 

Client orders which meet or exceed WSII’s internal risk limits and/or orders canceled by WSII’s executing broker(s) during extended  hours trading sessions will be canceled. You will receive an email notification if any order is canceled. 

Order Routing: For information on order routing, please refer to the Best Execution and Order Handling Disclosure.

Opening and Closing Auctions: All orders entered may participate in opening/ closing auctions or crossing sessions.