AGGU small pricing
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AGGU small pricing
So i’m trying to buy AGGU which is about 5 usd/share, but the broker warns that my purchase is above 500 share limit
what the hell.. 500 share is only $2500
Is it ok to make larger order ie 2000 shares/transaction?
what the hell.. 500 share is only $2500
Is it ok to make larger order ie 2000 shares/transaction?
Re: AGGU small pricing
It is definitely ok in general to submit much larger orders. You didn't mention your broker. Different brokers can, of course, impose different rules and limitations on their customers. As a specific example, Interactive Brokers will give a warning for orders larger than some arbitrary share threshold, but this warning can be acknowledged and overridden by the user.
For larger orders, consider using limit orders rather than market orders, to optimize execution prices.
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Re: AGGU small pricing
https://www.marketwatch.com/investing/F ... tryCode=CH
It seems AGGU has no liquidity.
This might hurt you greatly cause every buyer needs a seller and vice versa (in other words, price will dramatically rise more you buy [also an issue when selling]).
Most days I see have basically 0 trades.
Liquidity should be a huge factor when investing.
If there's no market of buyers/sellers, then while the 'actual assets' might be worth say $100, you will have to sell for $50 and so on (it works in reverse too. 'actual share price' might be worth say $100 but you might have to pay $300).
[this is highly exaggerated because market makers will 'somewhat' balance the arbitrage if it's notable for ETFs but you will still be paying above NAV (and selling below NAV)]
In general, I highly recommend against investing in stocks/ETFs with poor liquidity.
I know for instance in the US, you can move even known companies like $WEN by 10 cents for a short period of time with only 2000+ shares in certain times of day. And that's a stock that has average daily trading volume of 4.84 million.
AGGU in comparison has a 250 daily trading volume (penny stocks have more liquidity than this and pretty much everyone in industry is against investing (aka gambling) in penny stocks).
I would assume when you buy AGGU, you will have to pay huge premium (market makers will probably enjoy this arbitrage) and when you sell, you will have to pay a huge discount. Just doesn't sound like a good deal overall.
It seems AGGU has no liquidity.
This might hurt you greatly cause every buyer needs a seller and vice versa (in other words, price will dramatically rise more you buy [also an issue when selling]).
Most days I see have basically 0 trades.
Liquidity should be a huge factor when investing.
If there's no market of buyers/sellers, then while the 'actual assets' might be worth say $100, you will have to sell for $50 and so on (it works in reverse too. 'actual share price' might be worth say $100 but you might have to pay $300).
[this is highly exaggerated because market makers will 'somewhat' balance the arbitrage if it's notable for ETFs but you will still be paying above NAV (and selling below NAV)]
In general, I highly recommend against investing in stocks/ETFs with poor liquidity.
I know for instance in the US, you can move even known companies like $WEN by 10 cents for a short period of time with only 2000+ shares in certain times of day. And that's a stock that has average daily trading volume of 4.84 million.
AGGU in comparison has a 250 daily trading volume (penny stocks have more liquidity than this and pretty much everyone in industry is against investing (aka gambling) in penny stocks).
I would assume when you buy AGGU, you will have to pay huge premium (market makers will probably enjoy this arbitrage) and when you sell, you will have to pay a huge discount. Just doesn't sound like a good deal overall.
Re: AGGU small pricing
AGGU has liquidity at LSE. Seems you are talking about SIX.fwellimort wrote: ↑Mon Jun 21, 2021 12:39 pm https://www.marketwatch.com/investing/F ... tryCode=CH
It seems AGGU has no liquidity.
This might hurt you greatly cause every buyer needs a seller and vice versa (in other words, price will dramatically rise more you buy [also an issue when selling]).
Most days I see have basically 0 trades.
https://www.londonstockexchange.com/sto ... mpany-page
Today's volume was 210,295 shares.
OP didn't mention which market it was about, so I guess it could be either. Too little details to comment anything.
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Re: AGGU small pricing
Thanks for the explanationMaple wrote: ↑Mon Jun 21, 2021 12:34 pmIt is definitely ok in general to submit much larger orders. You didn't mention your broker. Different brokers can, of course, impose different rules and limitations on their customers. As a specific example, Interactive Brokers will give a warning for orders larger than some arbitrary share threshold, but this warning can be acknowledged and overridden by the user.
For larger orders, consider using limit orders rather than market orders, to optimize execution prices.
I do use IBKR
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Re: AGGU small pricing
Sorry, i thought AGGU only trade at LSE?oogZoo wrote: ↑Mon Jun 21, 2021 5:09 pmAGGU has liquidity at LSE. Seems you are talking about SIX.fwellimort wrote: ↑Mon Jun 21, 2021 12:39 pm https://www.marketwatch.com/investing/F ... tryCode=CH
It seems AGGU has no liquidity.
This might hurt you greatly cause every buyer needs a seller and vice versa (in other words, price will dramatically rise more you buy [also an issue when selling]).
Most days I see have basically 0 trades.
https://www.londonstockexchange.com/sto ... mpany-page
Today's volume was 210,295 shares.
OP didn't mention which market it was about, so I guess it could be either. Too little details to comment anything.
ADV of 210,295 seems liquid to me
Re: AGGU small pricing
This is not entirely true due to the way authorized participants works when making the market for ETFs. This gives a lot of inherent protections in what you describe by guaranteeing a level of liquidity even if there is no trading volume.fwellimort wrote: ↑Mon Jun 21, 2021 12:39 pm It seems AGGU has no liquidity.
This might hurt you greatly cause every buyer needs a seller and vice versa (in other words, price will dramatically rise more you buy [also an issue when selling]).
Most days I see have basically 0 trades.
Liquidity should be a huge factor when investing.
If there's no market of buyers/sellers, then while the 'actual assets' might be worth say $100, you will have to sell for $50 and so on (it works in reverse too. 'actual share price' might be worth say $100 but you might have to pay $300).
[this is highly exaggerated because market makers will 'somewhat' balance the arbitrage if it's notable for ETFs but you will still be paying above NAV (and selling below NAV)]
In general, I highly recommend against investing in stocks/ETFs with poor liquidity.
I know for instance in the US, you can move even known companies like $WEN by 10 cents for a short period of time with only 2000+ shares in certain times of day. And that's a stock that has average daily trading volume of 4.84 million.
AGGU in comparison has a 250 daily trading volume (penny stocks have more liquidity than this and pretty much everyone in industry is against investing (aka gambling) in penny stocks).
I would assume when you buy AGGU, you will have to pay huge premium (market makers will probably enjoy this arbitrage) and when you sell, you will have to pay a huge discount. Just doesn't sound like a good deal overall.
The way to measure the problem is to look at the bid/ask spread on a quiet trading day with no volume. Vanguard tends to have spreads of about 0.1% and iShares are even tighter. Check for yourself that you are happy with the bid/ask spread.
p.s. Can someone post the reference to Vanguard's explanation on authorized participants and why lack of daily volume is not directly an issue at all
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Re: AGGU small pricing
Hm from the link you give, perhaps they mean 253,78 thousand?fwellimort wrote: ↑Mon Jun 21, 2021 12:39 pm https://www.marketwatch.com/investing/F ... tryCode=CH
It seems AGGU has no liquidity.
This might hurt you greatly cause every buyer needs a seller and vice versa (in other words, price will dramatically rise more you buy [also an issue when selling]).
Most days I see have basically 0 trades.
Liquidity should be a huge factor when investing.
If there's no market of buyers/sellers, then while the 'actual assets' might be worth say $100, you will have to sell for $50 and so on (it works in reverse too. 'actual share price' might be worth say $100 but you might have to pay $300).
[this is highly exaggerated because market makers will 'somewhat' balance the arbitrage if it's notable for ETFs but you will still be paying above NAV (and selling below NAV)]
In general, I highly recommend against investing in stocks/ETFs with poor liquidity.
I know for instance in the US, you can move even known companies like $WEN by 10 cents for a short period of time with only 2000+ shares in certain times of day. And that's a stock that has average daily trading volume of 4.84 million.
AGGU in comparison has a 250 daily trading volume (penny stocks have more liquidity than this and pretty much everyone in industry is against investing (aka gambling) in penny stocks).
I would assume when you buy AGGU, you will have to pay huge premium (market makers will probably enjoy this arbitrage) and when you sell, you will have to pay a huge discount. Just doesn't sound like a good deal overall.
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Re: AGGU small pricing
TedSwippet wrote: ↑Wed Jun 23, 2021 2:35 amThis paper?
Understanding ETF liquidity and trading | Vanguard