I say this with self-aware irony but perhaps the only thing worse than knowing nothing about how the market works is knowing a little bit and filling in the blanks poorly
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Follow up (please read before you respond to the first thread especially if you are going to say something about inflows....)https://twitter.com/macrocephalopod/status/1362758016454508544 …
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the only real new thing about market impact and ETFs is that indices include assets with varying market-depth and liquidity and sometimes when active discretionary actors (like RIAs or members of a popular forum) move together they cause ripples in less-liquid index constituents
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if you are not careful with the create/redeem basket design it could end up acting as a tax on your AP which has to deal with that one name in the basket that has no market depth, but this is mostly specific to thematics, actives, & equal-weights and its a fairly localized effect
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