Trying to understand how this is possible...

Forgive the rather newbie question. But when I see TBF, which is the short 20+ year treasury ETF, and TLT, which is the 20+ year treasury ETF, I am making the assumption that these are exact opposites.

So how is it that, for the second day in a row, I can see both at negatives during certain points of the day?

It has to be a feed issue, no?

 

Lagging TBF because of lower volume?

 

Maybe it has something to do with volatility related because I've often seen the same problem with SVXY and UVXY???

 

Could be either of those I suppose. I mean, it's not supposed to be able to happen, right?

 

Thinly traded issues often have "gaps" in activity and then "catch up". Perhaps compare TBT instead of TBF?.... TBT has about 4x the volume of TBF.

It's kind of like considering the possibility of arbing the ES vs SPX. It seems you should be able to... but the issue is actually that the ES reflects prices immediately while the SPX takes a bit of time to be reflected on the tape. When you actually try to arb it, the "perceived discrepancy" doesn't really exist in a functional way to be possibly exploited.... it's merely due to a lag in getting reported.

 

Or maybe (this is just an assumption) you are seeing "last price" on these thinly traded leveraged ETF's...hence, without that bid-ask data and assuming these things might not trade for long stretches of time, you're not getting the true market mid-price.

 

With the noted exception that TBT is levered.

 

Yes, but with much higher volume should avoid any "low liquidity lag".... if low volume is indeed the root of what you've observed.

 

Except that TLT and TBF are relatively liquid and prints should be happening often.