The basic process for buying and selling ETPs is the same as trading shares of your favorite companies like Apple or HSBC. Orders are entered during exchange trading hours via a normal brokerage account and settlement of the trade takes place two business days after the transaction (T+2). For a purchase, legal ownership of the ETP is transferred to the investor and for a sale, funds are deposited into their account.

Leverage Shares ETPs are listed on the London Stock Exchange, Deutsche Boerse Xetra, Euronext Amsterdam and Borsa Italiana. These exchanges form what is known as the “Secondary Market” where market participants both large and small (such as Individual Investors, Market Makers, Banks and Hedge Funds) come together to place bids and offers. It is these participants’ trades that create the market prices that you see at your broker and in places like Google and Yahoo Finance. Leverage Shares is in no way able to influence or guarantee the market prices seen at each exchange, however we do hire market makers to help ensure there is enough liquidity and tight spreads to facilitate trading.

Leverage Shares has market making contracts with BNP Paribas and Virtu Financial, although those are not the only firms participating and adding liquidity to ETP orderbooks throughout Europe – arbitragers are always on the lookout for market price inefficiencies and therefore helping to improve ETP price accuracy. A market maker is a professional trading entity, appointed by the exchange and/or the product issuer to provide liquidity throughout the trading day, updating their bids and offers to reflect changes in their valuation of the underlying assets held by each ETP. Through their actions, market makers help to ensure that buyers and sellers of ETPs can transact at prices close to the live net asset value (NAV).

All investors are best served by their brokers when they fully understand each brokers’ trade execution strategy, as a number of parameters such as but not limited to execution fees, speed of execution, choice of venue, and timeliness of market data can all impact the final price an investor may receive for an order. Such conversations with a broker should also include their tips for best practices for trading execution such as but not limited to reviewing orderbook liquidity before placing trades, favoring limit orders over market orders (which have no pre-defined price), and trading securities with the correct account currency. By understanding their broker’s strategy and following best practices, investors can minimize the impact on their bottom line!