Wait was I supposed to respond to this
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i had heard spy was more liquid that futures. (obviously.. i know nothing.)
It's not even close, futures do 10x the volume than spy on most days
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most of the SPY institutional volume is NAV redeem/create though, right? and spread width, not volume is what I mean when I say "liquid" but of course... I can't move the market.
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I would say liquidity is a measure of how much size can be executed in a short time period without moving the market... related but not exactly the same as bid/ask...
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ok, but they reference the same underlying basket of stocks... that is the real volume, not whatever prints on some etf or futures contract. ivv has similar liquidity to spy (even though volume is way lower) b/c it can be created/redeemed for the same underlying names
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Sure, they track. But where does price discovery happen? When there's a big news print, do market participants rush to trade stocks, and that causes futures to move? Absolutely not. They just pile into futures because that is way easier, and stocks follow.
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