The bank has reportedly blocked the option of shorting cannabis stocks through its InvevstorLine brokerage to at least four retail investors. The investors were unable to examine another option to short those stocks with the Bank of Montreal.
The investors found that shorting was blocked for the entire cannabis sector.
“They said from a risk perspective, it’s too volatile,” one retail investor told the Post.
Interestingly, the shorting was not closed off from institutional investors who relied on BMO's prime brokerage desk, nor for the investment advisors of the bank, the publication reported.
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These are recent restrictions, as one of the investors told the Post they were allowed to short CannTrustHoldings Inc (NYSE: CTST) via BMO’s InvestorLine in July.
Toronto Dominion Bank’s brokerage, the National Bank of Canada and Canadian Imperial Bank of Commerce are allowing shorting of stocks in the cannabis sector, the Post said.
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