ARCA/Barclays

Barclays 5 new products on ARCA which launched last friday had mixed results today.

REZ=2000 shares, FIO= 0 shares, RTL=1000 shares,

FTY=3,300 shares and REM=11,200 shares. The only other ARCA IPO, NXT, had volume of 300 shares.

FIRST TRUST will launch 3 ETFs on ARCA this thursday along with 17 being listed on the AMEX.

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2 Responses to “ARCA/Barclays”


  1. 1 Robert Ludke August 22, 2007 at 8:47 pm

    Steve – I am very impressed that you have a blog site. Can you please share with your readers the pros and cons of investing in ETFs in a time of market instability? And, do you think that ETFs actually encourage market instability because they allow for trading of large blocks of securities throughout a trading day?

    Your devoted nephew-in-law

  2. 2 sogsr September 1, 2007 at 10:32 pm

    Investing in ETFs in a time of market instability is really no different than investing in Mutual Funds during a period of instability. I personally prefer instability as it creates opportunities that do not occur during periods of stability/low volatility.
    Do ETFs encourage market instability because they allow trading of large blocks during the trading day? Not hardly. A Specialist or market maker normally sells an ETF to an investor and quickly buys he underlying basket of stocks to be hedged. If the Specialist/market maker buys an ETF from a seller, they normally sell the underlying basket of stocks. This actually can be stabilizing. The second part of the equation is that with ETFs like Spiders, the underlying basket is the S&P 500. These stocks have large volume with or without the ETF volume. With smaller ETFs, the percentage of each ETF made up of any one stock is small. As a consequence the ETF related underlying volume does not normally affect the volatilty.
    Possible exceptions are commodity based ETFs. The gold ETFs have certainly had an effect on the price of bullion in that as they have grown they have cause gold to be acculmulated in the ETF thereby effecting the supply side. Any commodity with limited supply can be affected. Looking back to potato contracts some years ago, ETFs could have had a dramatic effect.


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