Investors will be able to buy individual parts of the Canadian Pacific empire on Tuesday, when its five divisions each begin trading as separate entities on the Toronto Stock Exchange.

Shares in CP Rail, CP Ships, Fording, Fairmont Hotels and Resorts, and PanCanadian Energy begin trading on a "when-issued" basis Tuesday.

"When-issued" trading is a conditional buy or sell of a security that hasn't yet been formally issued. Since the TSE is confident the spin-offs will be approved by CP's shareholders, it's allowing the shares of the soon-to-be-spun-off companies to trade before the spin-off actually happens.

The trades won't be settled until the breakup of CP is completed – something that's expected October 1.

The breakup is the result of CP's announcement last February that it would spin off its interests in the five divisions to allow each to operate separately.

The feeling in the company and in the investment community was that CP's stock was being constrained by the so-called "conglomerate effect" – that investors tend to prefer pure-play investments.

In other words, some investors who want a hotel stock may not buy CP stock, since its Fairmont Hotels and Resorts represents such a small portion of CP overall.

For every 100 CP shares investors hold, they'll receive 68.4 shares of Pan Canadian Energy (the new name for PanCanadian Petroleum), 50 shares of CP Rail, 25 shares of Fairmont Hotels and Resorts, 25 shares of CP Ships, and 16.6 shares of Fording (CP's coal mining division). Currently only PanCanadian trades on its own, with CP owning 86.6 per cent of the shares. Those shares will be spun off in the restructuring.

There's considerable speculation in the investment community about which of the five divisions will benefit most from the spinoff. Many think that some volatility lies ahead in the share price (especially for the smaller units) as sellers may outnumber buyers.

But many analysts agree that a possible takeover of any of the divisions would become more likely when they're trading as separate companies.

CP's five divisions will trade on both the NYSE and the TSE. (PanCanadian now trades on the Nasdaq and the TSE.) Shares of the conglomerate Canadian Pacific will continue to trade until the restructuring is complete.