In regards to exchange traded funds (ETFs), liquidity can be an issue. The number of shares traded is far less important in relation to the specialist’s drive to execute orders, according to Roger Nusbaum of TheStreet.com. From the ETF providers point of view, an ETF should be easily traded and accommodate both individual and institutional investors. Any perception of an ETF being hard to trade works against the providers interest. For the more popular ETFs, liquidity isn’t really an issue, but when trading the lower volume ETFs, it can come into consideration.
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