Can someone explan how all this works? Example. FPAG, newer ETF, ave daily volume 3800 shares. That is low. Say someone wanted to buy $240,000 (~10,000 shares) of the ETF. How would that work, place a limit trade but at what point/spread? Would the ETF fund mgmt then just issue more shares to meet the order (not sure if I stated that correctly)? The price would not be affected like it would it one bought a ton of stock in a company with a low float? Underlying investments in FPAG seem to be very liquid.
How would that work if one owned the quarter million in FPAG, the market got a schmeissing and you wanted to bail, how would that work, due to low volume would there be a problem?
How should one be thinking about a scenario like this?
Baseball Fan
Comments
Retail investors should keep orders at small fractions of the daily volume, e.g. 5% or 10%, and use limit-orders. No retail buyer should dump a market-order for 10,000 shares for something that traded only 3,800 daily. But this sort of thing does happen in pre/post-market (afterhours) trading that is very illiquid. A market-order of just a few hundred shares can be HUGE for afterhours. Some do it for manipulation that doesn't stick in normal trading.