{"id":175309,"date":"2020-08-25T18:32:00","date_gmt":"2020-08-25T22:32:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/trading-lessons\/etfs-and-market-volatility-events-2\/"},"modified":"2023-04-25T20:51:57","modified_gmt":"2023-04-26T00:51:57","slug":"etfs-and-market-volatility-events-2","status":"publish","type":"trading-lessons","link":"https:\/\/www.interactivebrokers.com\/campus\/trading-lessons\/etfs-and-market-volatility-events-2\/","title":{"rendered":"ETFs and Market Volatility Events"},"content":{"rendered":"<h3>ETF Volumes Increase During Volatility<\/h3>\n<p><img decoding=\"async\" class=\"twothird wp-image-1828 size-medium alignnone lazyload\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/01\/01-etf-increase-volitility.jpg\" alt=\"\" width=\"821\" height=\"540\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 821px; aspect-ratio: 821\/540;\"><\/p>\n<h3>HY ETF Trading Behavior<\/h3>\n<p>Premium &amp; Discount<\/p>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-1829 lazyload\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/01\/02-etf-trading-behavior-scaled.jpg\" alt=\"\" width=\"960\" height=\"456\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 960px; aspect-ratio: 960\/456;\"><\/p>\n<h3>High Yield ETF Trading<\/h3>\n<p>High Yield Volume versus High Yield ETF Primary Market Activity.<\/p>\n<ul>\n<li>During periods of high volatility, the High Yield ETF primary market activity is only a small percentage of overall High Yield cash bond trading<\/li>\n<li>High Yield ETFs have become a notable trading tool<\/li>\n<li>The secondary market volume is additive to the liquidity profile of the overall High Yield market<\/li>\n<\/ul>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-1830 lazyload\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/01\/03-high-yield-etf-scaled.jpg\" alt=\"\" width=\"960\" height=\"416\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 960px; aspect-ratio: 960\/416;\"><\/p>\n<h3>Case Study: August 24, 2015<\/h3>\n<h4>What happened<\/h4>\n<p>Global growth concerns triggered a sharp selloff in emerging markets, and spilled over into US markets. This resulted in pre-market volatility, an atypical opening market process, and SPY\u2019s largest notional trading session ever.<\/p>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-1831 lazyload\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/01\/04-case-study-pre-market-volitility-scaled.jpg\" alt=\"\" width=\"960\" height=\"482\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 960px; aspect-ratio: 960\/482;\"><\/p>\n<h3>Case Study: February 2018<\/h3>\n<h4>What happened<\/h4>\n<p>A technically driven unwind of historically long S&amp;P 500 derivative positioning contributed to equity market volatility on February 5 and 6, resulting in SPY\u2019s 2nd and 3rd largest notional trading sessions ever.<\/p>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-1832 lazyload\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/01\/05-case-study-equity-market-volitility-scaled.jpg\" alt=\"\" width=\"960\" height=\"474\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 960px; aspect-ratio: 960\/474;\"><\/p>\n<h3>Case Study: Q4 2018<\/h3>\n<p>SPY maintains consistent spreads during market selloff.<\/p>\n<h4>What happened<\/h4>\n<p>Market volatility spiked in the 4th quarter of 2018, as concerns over slowing global growth, tightening monetary policy and escalating trade wars resulted in a sharp market selloff. During this time period, SPY\u2019s spreads remained at consistent levels.<\/p>\n<p><strong>An ETF liquidity comparison:<\/strong> In Q4 2018, the iShares Core S&amp;P 500 ETF (IVV) saw spreads widen with heightened volatility. Meanwhile, SPY maintained consistent spreads\u2014allowing investors to pivot in any direction with the same trading costs.<\/p>\n<p><img decoding=\"async\" class=\"twothird alignnone wp-image-1833 size-medium lazyload\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/01\/06-case-study-q4-2018-1.jpg\" alt=\"\" width=\"875\" height=\"540\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 875px; aspect-ratio: 875\/540;\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This lesson will discuss:<br \/>\n\u2022 ETF Volumes Increase During Volatility<br \/>\n\u2022 High Yield ETF Trading Behavior<br \/>\n\u2022 High Yield ETF Trading<br \/>\n\u2022 3 Case Studies<\/p>\n","protected":false},"author":1,"featured_media":169849,"parent":0,"comment_status":"open","ping_status":"closed","template":"","meta":{"_acf_changed":false,"footnotes":""},"contributors-categories":[13643],"traders-academy":[13126,13128,13132],"class_list":{"0":"post-175309","1":"trading-lessons","2":"type-trading-lessons","3":"status-publish","4":"has-post-thumbnail","6":"contributors-categories-state-street-global-advisors","7":"traders-academy-intermediate-trading","8":"traders-academy-level","9":"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 v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Archives | Traders&#039; Academy | IBKR Campus<\/title>\n<meta name=\"description\" content=\"In the majority of periods in which the market is distressed, 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