Knight's most recent issues are proving particularly problematic for the ETF world.
According to IndexUniverse
, the average spread for an ETF trading less than 50,000 times per day has doubled since the trouble began, from 56 bps to 94 bps.
For low-liquidity ETFs, where Knight is the Lead Market Maker according to the report, the spread has gone from a 49 basis point average to 153 basis points.
The IndexUniverse article, written by Dave Nadig, cautions that this "means if ever there was a time to tread carefully into illiquid ETFs, now's that time."
The story was also picked up by Business Insider
, and BloombergBusinessweek
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