Over the last few months, I profitably traded the spread between West Texas Intermediate and Brent.
Out of interest the spread traded at 179 basis points as recently as six months ago.
Of note, the 2017 issue traded yesterday at 1.2% and at a G-spread of 54 bps, and the 2022 notes traded this morning at 2.58% and at a G-spread of 80 bps.
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If the ETF is little traded the bid-ask spread will be high, and a reasonably small order may move the market.
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We figure what he got on the 76 days he traded captured 47% of the spread between the high and low price.
By comparison, the bid ask spread for the large much traded SPDR is a very reasonable 1 cent and even very large trades will not move the market.
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Many investors are using exchange-traded funds to diversify across the sector and spread their risk, rather than betting on one or two companies.
One issue for investors, according to Mr. Rosenbluth, is that this two-year-old fund is thinly traded and can have a wide bid-ask spread (the difference between the prices potential buyers "bid" to acquire shares and the prices potential sellers "ask" to part with theirs).
The 2042 issue traded yesterday at 4.15% and at a G-spread of 98 bps, according to MarketAxess.
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Among those spread across many commodities, experts highlight two low-cost exchange-traded funds.
The spread ranged from 12 percentage points a year between the least and most actively traded microcaps to 2.8 points between the least and most popular megacaps.
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