“But this is quite normal, and acceptable for an ETF,” Street One Financial said.
Instead, one should look at the ETF’s Intraday Indicative Value, the IIV or NAV, for transparent, predictable trade executions. The only exception to this is for ETFs that included international holdings since securities are traded on different time zones.
Typically, the IIV should fall in between the bid/ask spread. When placing trades, investors should anticipate some wiggle room so that orders can be fully executed. Market makers and liquidity providers will help fill the trades, but they do not trade for free.
Street One Financial suggests that investors keep in mind what the potential price impact would be when placing an order and if they need to fill the position in its entirety or across a a period of time. Moreover, when entering an order at the trading desk, the firm also advises to place a “top” to establish the most you are willing to pay to fill the order while maintaining some level of price control.