Author Topic: trade execution / fills /liquidity with ETF's  (Read 3734 times)

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Offline ivan

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trade execution / fills /liquidity with ETF's
« on: 11/10/2018, 06:34:30 PM »
HI All,

today I had a trade open to sell IJH with broker CMC ( stocks)  @market.  The order was never filled which concerns me.  I will admit I don't fully understand the liquidity situation with ETF's, but my understanding is there is effectively a market maker ( in this case iShares) standing in the market in case it needs to provide liquidity .

If this is the case how could it be that a market order doesn't get filled ?  Would like to hear if others have also had this experience because in these recent times of volatility  if I cant exit a position with a major ETF provider iSHARES  then something is very wrong.

regards
Ivan

Offline Steve Nelson

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Re: trade execution / fills /liquidity with ETF's
« Reply #1 on: 12/10/2018, 12:14:14 AM »
Hi there Ivan

All comments below relate to my trading on the ASX, but I expect US exchanges would be the same.

Ive made lots of trades on ETF's over the last 4 years or so. In the case of Vanguard, iShares etc they appoint at least 1 and often more market makers for an ETF and these may be different market makers for differing ETF's. They have an agreement for the market makers to take all trades that are within a spread they have specified and agreed with them (per ETF).

I have never had an instance where the market maker doesn't take a trade that is within the spread. In addition if their spread is wide I find they will often also meet my price if they will still make an acceptable margin on the trade. So Im pretty sure the market maker is not the problem.

I have had a couple of isolated instances in regular (non ETF) trades where an "at market" trade hasn't got filled. This seems to be when a partial fill happens at the open and the "at market" price seems to somehow then become an "at limit" price. This would seem to be an issue with the brokers specific trade rules. Others might be able to comment more on this?

In any event if your still worried I suggest you call ishares direct. Ive had a few questions on ETF's at differing stages and I find that the ETF providers have great customer service and they will typically give you a quick answer to whatever questions you have.

Hope that helps

Cheers

Steve

Offline ivan

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Re: trade execution / fills /liquidity with ETF's
« Reply #2 on: 12/10/2018, 08:25:16 AM »
HI Steve,

thanks for the reply .   Yes I will contact ishares and CMC although in the past CMC haven't really been too helpful with any of my queries .
I forgot to mention this was IJH trading on the ASX not the USA stock

regards
Ivan

Offline Gary Stone

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Re: trade execution / fills /liquidity with ETF's
« Reply #3 on: 12/10/2018, 10:06:04 AM »
Ivan,

iShares has great customer service. I have called them regarding spreads and 'liquidity' with IJH on the ASX to get orders filled and they have been brilliant.

Market makers for iShares mostly reside in Singapore and Hong Kong and are not that active during the AM session on the ASX. Spreads will be wider during this time. If you want to transact in this timeslot then call the Customer Service No on the Australian iShares website and tell them your lot size and which broker you use and they will find a MM to fill your order.

You can also do this in the PM too if you are not happy with the spread.

I  have recommended this to a number customers who have had the same good experience.

Regards,
Gary
On the journey

Offline Gary Stone

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Re: trade execution / fills /liquidity with ETF's
« Reply #4 on: 12/10/2018, 11:09:56 AM »
Steve,

Forgot to add that trading ETFs on the US Exchanges is not the same. You can trade 'at Market' any time of the day. Spreads remain tight nearly all the time.

Regards
Gary
On the journey

Offline Colin

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Re: trade execution / fills /liquidity with ETF's
« Reply #5 on: 12/10/2018, 11:44:45 AM »
Just tried to sell AFI on CMC at market, wouldn't process the order. New experience for me.
Colin

Offline PeterM

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Re: trade execution / fills /liquidity with ETF's
« Reply #6 on: 12/10/2018, 11:56:53 AM »
wouldn't process it  :eek: that does not sound very good.  I'd be very interested to know how that ends up for you guys.  Both IJH and AFI. 

I've been waiting to get into IJH etc since I re-joined earlier this year so the mad sell off yesterday was welcome in part - not so good for some ASX stocks that I just go into; ORG in particular.

Offline Steve Nelson

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Re: trade execution / fills /liquidity with ETF's
« Reply #7 on: 12/10/2018, 12:33:39 PM »
Colin I had no problem selling AFI on the asx this morning. Maybe this is a CMC issue?

Offline Don McKinnon

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Re: trade execution / fills /liquidity with ETF's
« Reply #8 on: 12/10/2018, 02:48:57 PM »
In addition to the comments above, I have been advised by an ETF providor that, you should also not try to trade market order trades on Australian ETFs in the first or last 15 minutes of the trading day because in the early period the ETF markets are still opening and in the late period they are commencing to close.  Market orders in those periods are likely to have quite strange and disadvantageous results.  For similar reasons, it's a good idea to not try to trade limit orders in those times either.

Regards
Don

Offline Nick Rossetto

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Re: trade execution / fills /liquidity with ETF's
« Reply #9 on: 12/10/2018, 03:35:12 PM »
CMC Markets have a data feed issue - they will process trades over the phone at Internet rates. Hopefully fixed soon - it's quite disconcerting not having accurate price data. I normally close trades circa 3.45pm but have closed MQG earlier whilst I had a consultant on the phone who transferred me straight through to the SEATS operator.

Offline Colin

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Re: trade execution / fills /liquidity with ETF's
« Reply #10 on: 12/10/2018, 06:59:25 PM »
Managed to place order about mid day WST. I guess it was a CMC issue, didn't have time to ring and clarify the problem today.
Colin

Offline ivan

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Re: trade execution / fills /liquidity with ETF's
« Reply #11 on: 26/10/2018, 04:53:24 PM »
Just an update from me regarding this execution issue

Its now 15 days after the event and CMC still can't tell me why my order wasn't executed .  The excuse is "our back office IT team are currently back-logged" 
gotta love that one...

I'm not surprised , they have never provided good customer service.   I did contact iShares who confirmed they had a market maker buying at the bid all day .

My suggestion is to give CMC a wide berth, its not the first time this has occurred with executions and they are just taking their customers for granted with zero follow up

regards
Ivan

Offline Claude

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Re: trade execution / fills /liquidity with ETF's
« Reply #12 on: 26/10/2018, 08:11:26 PM »
https://media.anz.com/posts/2017/03/cmc-markets-to-provide-anz-share-investing-trading-platform

CMC’s problem is possibly due to the on boarding of ANZ customers to their platform. Other than the recent problem we experienced,  I have found the platform very good.