What is impactful about this transaction is the efficiency of the process—that Knight’s market making ability allowed them to commit the capital required to fill the client’s trade request, all in less than ten minutes. Furthermore, the client’s trade was accommodated with no price impact. As can be seen in the daily trading activity, the price efficiency of the large sum investment is in-line with the price range of the underlying ETF.
This is proof positive that the myth about ETF volume is just a myth. When the custodian, and market participants knows how to handle a trade, the efficiencies of the market kick into gear and enable orders to be filled, and the shareholder is rewarded with this efficiency.
Arrow Dow Jones Global Yield ETF
Ray Amani is director of product development at Arrow Investment Advisors. Joe Cunningham is director of capital markets at Arrow.