“The fact that equity ETFs traded below their net asset values due to trade halts in individual stocks is not a defect of ETFs, it’s an advantage that increases total liquidity.”
I assume that this is thoroughly explained to investors using ETF portfolios in the many robo-advisor and human advisor platforms and they understand and accept the trading risks.
I wonder about the potential for HFT shops to “game” ETFs, by inducing a trading halt in tickers known to represent a significant portion of some ETFs, and either buying/selling the ETFs during the trading halt, effectively arbitraging the trading halt that they spawned. Or perhaps I misunderstood …
“The fact that equity ETFs traded below their net asset values due to trade halts in individual stocks is not a defect of ETFs, it’s an advantage that increases total liquidity.”
I assume that this is thoroughly explained to investors using ETF portfolios in the many robo-advisor and human advisor platforms and they understand and accept the trading risks.
http://www.bloombergview.com/articles/2015-08-26/it-was-the-worst-of-ideas
I wonder about the potential for HFT shops to “game” ETFs, by inducing a trading halt in tickers known to represent a significant portion of some ETFs, and either buying/selling the ETFs during the trading halt, effectively arbitraging the trading halt that they spawned. Or perhaps I misunderstood …