A while ago -- admittedly a long time ago -- hedge fund customers had all the fun. Investors obtained their non-correlated giggles through diverse strategies such as trading around mergers, following futures markets trends, pitting long equity...
ETF liquidity, electronic trading and rogue algorithms all came under renewed scrutiny in the wake of the Knight Capital debacle. But the pundits got it wrong: The ETF market is liquid and sound.
News of market marker Knight Capital’s trading blunder has dominated the headlines the last couple days, causing many to speculate whether the firm will survive. One lesson coming out of the debacle: Avoid small, illiquid ETFs—at least for now...
