The liquidity of an Exchange traded funds (continuous quoting prices and little bid-ask spread) is guaranteed by the presence on the trading platform of three subjects:
- Official specialist: it places compulsorily bid and ask orders which have a maximum spread (percentage distance between bid and ask price) and a minimum quantity. Each ETF, ETC/ETN listed has one official specialist.
- Advanced Liquidity Provider: it provides liquidity by placing bid and/or ask orders for its own account, obligation are set in order to be maintained into the scheme. Each instrument can have only one advanced liquidity provider appointed by the relevant issuer.
- Liquidity provider: it provides liquidity by placing bid and/or ask orders for its own account, but it haven’t obligation in term of minimum quantity and maximum spread. Each ETF, ETC/ETN can have one or more liquidity providers.
For more info please refer to the sections at the top of the page.