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ETF volume relative to underlying index volume

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By Michael Panzner - November 19th, 2008, 12:06PM

As the market has sold off since January, exchange-traded fund volumes have outpaced those of the underlying indexes, suggesting that ETFs are increasingly becoming the hedging and speculative mechanisms of choice in the U.S. equity market.

Since the year began, volume in the PowerShares QQQ (QQQQ) ETF relative to the Nasdaq-100 index has jumped from around 35% to more than 50%; in the iShares Russell 2000 ETF (IWM) relative to the index, from around 20% to 30%; and in the SPDR Trust Series 1 (SPY) relative to the S&P 500 index, from around 17% to 27%.

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ETF volume relative to underlying index volume

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Category: BP Cafe, Index/ETFs, Technical Analysis.

Comments

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

One Response to “ETF volume relative to underlying index volume”

  1. KJ Foehr Says:
    November 19th, 2008 at 1:51 pm

    You bet. I like reducing specific stock risk.

    I sold a couple today, SRS, QID, and TWM.

    I still own EEV, SMN, DUG, and SCC.

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