To accustom participants to the new technology, ICE ETF Hub will launch a pilot program allowing customers to test the custom basket negotiation in a live setting. Market makers including Jane Street, Old Mission, CTC, and others have already enrolled in the program and ICE ETF has said it expects others to follow in the coming months.
Allianz Investment Management is stepping into a growing corner of the $4 trillion ETF market with two funds that protect against stock losses. The AllianzIM U.S. Large Cap Buffer10 Apr ETF, or AZAA, and the AllianzIM U.S. Large Cap Buffer20 Apr ETF, or AZBA, begin trading Monday. The exchange-traded funds will seek to track S&P 500 Price Return Index up to a stated cap on gains, while shielding investors against the first 10% and then 20% of losses should the gauge drop.
More trading is taking place at the end of the day, including at the closing auction—or the final 4 p.m. trade—which determines end-of-day prices for thousands of stocks. From the start of this year through Friday, about 23% of trading volume in the 3,000 largest stocks by market value has taken place after 3:30 p.m., according to data from Pragma LLC. That’s compared with about 4% from 12:30 p.m. to 1 p.m.
Sharp stock moves are punctuating the final minutes of the trading day, exacerbating what has already been one of the rockiest stretches of the past decade for financial markets. Major U.S. stock indexes peaked in mid-February and have since dropped at least 19%, with the Dow Jones Industrial Average entering a bear market, reflecting worries that the coronavirus epidemic will halt growth and eventually tip the economy into a recession.
Being able to deftly price risk has differentiated Chicago-based market maker Old Mission, according to Bryan Christian, Managing Director, Head of Business Development and Strategy, describing his firm which has traditionally specialised in trading the hardest to price and most illiquid ETFs. News came at Inside ETFs, that the firm is to open up a direct-to-buyside offering to the institutional community.