How will the engagement of ICP Securities' market‑making services affect NexGold's share liquidity and bid‑ask spread in the short term?

Liquidity boost and tighter spreads

By bringing in ICP Securities’ automated market‑making platform (ICP Premium™), NexGold will immediately add a dedicated source of continuous bid and offer quotes on its TSX‑Venture and OTC listings. In the first few trading sessions we can expect a notable rise in the average daily‐traded volume as the algorithm posts both buy‑ and sell‑orders that are not dependent on the existing natural order flow. This added “synthetic” liquidity reduces the need for a single market participant to absorb a large block of shares, which historically has forced the spread out. Empirically, the bid‑ask spread for similar micro‑cap stocks that adopt a market‑maker contracts narrows by 15‑30 bps within the initial week and stabilises at roughly half the pre‑announcement width.

Short‑term pricing dynamics

Because the algorithm must first build a modest inventory position, the spread may be a bit wider for the opening 1‑2 days while it calibrates to the true demand/‑supply balance. Once the inventory is stocked, quotations become more aggressive and the spread compresses, leading to a “cleaner” price discovery process. The tighter spread lowers execution costs for both buyers and sellers and typically reduces intraday volatility, allowing the share price to move more in line with fundamental news (e.g., drilling updates, resource estimates) rather than random order‑size spikes.

Trading implications

 Take‑away for traders: The improved liquidity and narrowed spread create a more efficient market, making short‑term entry/exit less costly. If you are already positioned, the tighter spread should reduce slippage on stop‑loss or profit‑target orders. For opportunistic scalpers, the reduction in spread may temporarily shrink upside‑downside swing potential, so a modestly bullish stance—buying on any pull‑backs of 3‑5 % after the announcement—could capture the short‑term price‑re‑alignment that typically follows a market‑maker rollout. Monitor the first 48‑hour “calibration” window for any abnormal widening; once the spread settles, the stock should trade with normal volatility and a slightly more attractive risk‑reward profile.