3 Best Practices

The battle between hedge funds and retail investors over shares of GameStop at the end of January ignited one of the most drastic rallies and declines ever seen in a single stock. A hedge fund-driven short squeeze and the momentum of thousands of Reddit investors piling into the stock added fuel to the fire and even triggered trading halts. Since ETFs trade on an exchange, gyrations in the stock market and market-wide volatility can impact ETF trading and execution, but ETFs once again proved to be resilient. To help navigate the market frenzy, it’s always beneficial to revisit three trading best practices when it comes to ETFs.

Use limit orders when trading ETFs

A market order may be effective when placing small trades in highly liquid ETFs, but there is a risk that it could be executed at an undesirable price, especially in highly volatile markets as we witnessed recently. A limit order lets you set the price at which you are willing buy or sell an ETF, helping you avoid paying more or selling at less than a desired price. However, with limit orders, there is a risk that your trade will not be executable at the specified price, so the closer your price is to the bid or ask, the greater the probability that your sell or buy will be executed.

As Director of ETF Strategy, Nirujan’s primary responsibility includes working with the various departments within CI GAM to set and execute the ETF Sales Strategy and help promote the growth of the ETF business. Nirujan’s responsibilities also includes overseeing the ETF Sales Support team where he works alongside the sales team in assisting investors and advisors on ETF education and support. Nirujan brings a wealth of ETF knowledge, including ETF product management, indexing, factor research, ETF portfolio development, and has been involved in the launch of many ETFs in the Canadian marketplace. Prior to joining CI GAM, Nirujan held progressively senior roles with global asset managers Invesco and Horizons ETFs, where responsibilities included product management, product development and sales strategy in both the Canadian and U.S market. Nirujan holds a Bachelor of Commerce (Finance and Accounting) from Ryerson University and is a Level III candidate in the CFA Program.