Day trading ETFs vs. Stocks

Discussion in 'ETFs' started by bbot23, Mar 6, 2011.

  1. bbot23


    I have been day trading at a proprietary firm for years but only until recently I started looking at potential ETFs to day trade (a few weeks ago) and I have some questions...

    1. How do ETFs go up or down in price on hardly any volume? Sometimes I notice that the holdings of the ETF are going up and the ETF is doing so as well on practically no buying. Is the market maker or market making algorithm just moving the bid and offer around depending on what the holdings are doing?

    2. Can ETFs be "gamed"? For example a stock might be moving up simply because there is a big dark pool buyer or seller that needs to get in/out at that point in time. For ETFs, does this ever happen? From what I understand ETFs follow the holdings they are made up of. If someone tries to "block", say, the $5.10 price level of UNG while the natural gas stocks it represents are going up, won't arbitrageurs just keep buying UNG to put it in line with the holdings?

    I'm just trying to understand the world of ETFs and its mechanics better because I have been plenty of times massacred trying to play them like stocks short-term. It seems to me that it's a completely different playing field because they don't have a mind of their own: they follow the queues of their holdings. Am I wrong?
  2. punk ass nigga don know shit stick to spy trading.

    anyhow spy is just some pimped out paper they calls a creation units from what my barber told me.

    he says dem creation units representings the different stocks but aint the stocks them selves they be a derivatives that get the value off the stocks

    but if the creation units cheaper than them stocks you have to be this big balling pimp cause you can only redeem them in 50000 units like trading uncut coke to the streetboys so what you do is you turn it in the 50 kilos of uncut and you get the s&P 500 shares clean.

    then you can sell them shares and cash in on the difference between that NAV and the street price of stocks. you niggas call it arbitaging it up yo.

    same shit but opposite if them units cost more thans stocks so you turn them stocks in and get 50000 of them units.

    so thats why spy keeps track cause them big ballers keep up arbitaging it up.

    aint no game its all legit but trade them spy good money in it like slinging rock in the corner but no worries about popo.
  3. Donkell


    What ETF's are you talking about.

    There are various types, give me an example of which you are referring to.
  4. Tru dat.. Tru dat..
  5. the ghetto dude (or fake ghetto dude ) knows something about it. search for more - exchange-traded fund.