{"id":173814,"date":"2020-08-25T18:18:00","date_gmt":"2020-08-25T22:18:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/trading-lessons\/etf-market-structure-and-execution-strategies\/"},"modified":"2023-04-25T20:51:56","modified_gmt":"2023-04-26T00:51:56","slug":"etf-market-structure-and-execution-strategies","status":"publish","type":"trading-lessons","link":"https:\/\/www.interactivebrokers.com\/campus\/trading-lessons\/etf-market-structure-and-execution-strategies\/","title":{"rendered":"ETF Market Structure and Execution Strategies"},"content":{"rendered":"<h3>US ETFs: Where They Trade<\/h3>\n<h3>13 exchanges, 30+ alternative trading systems (ATSs), and many other non-exchange venues<\/h3>\n<p>US regulators have sought to facilitate a balanced market structure that promotes competition among trading venues while ensuring linkages among trading venues to provide opportunity for investor orders to meet.<\/p>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-1814 lazyload\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/01\/01-etfs-where-they-trade.jpg\" alt=\"\" width=\"960\" height=\"470\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 960px; aspect-ratio: 960\/470;\"><\/p>\n<p>&nbsp;<\/p>\n<h3>ETF Execution Strategies<\/h3>\n<p>Overview of ETF execution strategies for institutional size orders.<\/p>\n<p>Additional considerations include trade size, ETF secondary liquidity, time of day, volatility, and underlying security market structure.<\/p>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-1815 lazyload\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/01\/02-etf-execution-strategies.jpg\" alt=\"\" width=\"960\" height=\"412\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 960px; aspect-ratio: 960\/412;\"><\/p>\n<h3>Increased Use of RFQ Platforms for Block Trades<\/h3>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-1816 lazyload\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/01\/03-increased-rfq-platforms.jpg\" alt=\"\" width=\"960\" height=\"438\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 960px; aspect-ratio: 960\/438;\"><\/p>\n<h3>US ETFs: Market Structure Linkages<\/h3>\n<p>There are four main types of linkages connecting the US equity trading venues, ensuring that competition among trading venues does not detract from the opportunity for investor orders to meet directly.<\/p>\n<h4>Linkages Across Trading Venues<\/h4>\n<p><b>Trade-through rule: <\/b>Rule 611 of Regulation NMS, known as the \u201ctrade-through rule\u201d or \u201corder protection rule,\u201d forces price competition across trading venues in two ways: Restricts trades from occurring at prices worse than best displayed quotes in the marketplace Ensures that best displayed quotes in the marketplace are not bypassed by trades at inferior prices.<\/p>\n<p><b>Consolidated market data: <\/b>Consolidated market data allows trading firms to construct a consolidated view of order and trade data from multiple venues and thereby determine where to route orders.<\/p>\n<p><b>Best execution: <\/b>Brokers\u2019 legal duty of best execution requires them to obtain the most favorable terms available when executing customer orders.<\/p>\n<p><b>Smart order routing technology: <\/b>Brokers have commercial incentives to provide high-quality order routing technology to ensure they are accessing liquidity across the various trading venues in an optimal fashion for their clients.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This lesson will discuss:<br \/>\n\u2022 US ETFs: Where They Trade<br \/>\n\u2022 ETF Execution Strategies<br \/>\n\u2022 Increased Use of RFQ Platforms for Block Trades<br \/>\n\u2022 US ETFs: Market Structure Linkages<\/p>\n","protected":false},"author":1,"featured_media":170544,"parent":0,"comment_status":"open","ping_status":"closed","template":"","meta":{"_acf_changed":false,"footnotes":""},"contributors-categories":[13643],"traders-academy":[13126,13128,13132],"class_list":["post-173814","trading-lessons","type-trading-lessons","status-publish","has-post-thumbnail","contributors-categories-state-street-global-advisors","traders-academy-intermediate-trading","traders-academy-level","traders-academy-trading-lesson"],"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Archives | Traders&#039; Academy | IBKR Campus<\/title>\n<meta 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