--- title: ETFs May Offer OTC Pricing Insights description: Can old ETFs learn new price-discovery tricks? --- ![websites-group](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/new-MMG-01.svg) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-new-marketsmedia-logo.svg)](https://www.marketsmedia.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-traders-redlogo.svg)](https://www.tradersmagazine.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-bestexe-logo.svg)](https://www.bestexecution.net/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-fidesk-logo.svg)](https://www.fixglobal.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-fixglobal-new-logo.svg)](https://www.fixglobal.com/) - [*Facebook*](https://www.facebook.com/MarketsMedia/) - [*Twitter*](https://twitter.com/marketsmedia) - [*Linkedin*](https://www.linkedin.com/company/markets-media-llc) - [Newsletter](https://articles.marketsmedia.com/etfs-offer-otc-pricing-insights#popup-newsletter) #### Want the latest news on securities markets -- FREE? Sign up to receive exclusive articles on topics including: - Equity market structure - Profiles of buy-side investment firms - The evolution of multi-asset-class trading - Regulation and its implications for markets - The search for liquidity in fixed income markets - The convergence of fintech and capital markets Select one or more newsletters you would like to receive: menu [![Markerts media](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/header%20logo.svg "Markerts media")](https://articles.marketsmedia.com/) - [Bonds](https://articles.marketsmedia.com/tag/bonds) - Bonds - ETFs May Offer OTC Pricing Insights Search - [Home](https://articles.marketsmedia.com/) - [Trending](https://articles.marketsmedia.com/tag/trending) - [Featured](https://articles.marketsmedia.com/tag/daily-email-feature) - [Sectors](https://articles.marketsmedia.com/tag/sectors) - [From The Markets](https://articles.marketsmedia.com/tag/from-the-markets) - [AWARDS](https://articles.marketsmedia.com/tag/events) - [Newsletter](https://awards.marketsmedia.com/newsletter-sign-up) - [Newsletter](https://articles.marketsmedia.com/etfs-offer-otc-pricing-insights#popup-newsletter) Hide search Search - NewsLetter ![](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/trading-up-occ-iex-select-board-members-citadel-lands-lieblich-573x379-Jul-07-2022-09-34-11-57-AM.jpg) [ON THE MOVE: Citi Hires Artie Ambrose;...](https://articles.marketsmedia.com/on-the-move-citi-hires-artie-ambrose-natalie-a-brown-to-mesirow) ![](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/Depositphotos_445735906_L.jpg) [Trading Adapts to ESG and Sustainable...](https://articles.marketsmedia.com/trading-adapts-to-esg-and-sustainable-investing) ![](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/iStock-917493152-Jul-07-2022-09-34-19-09-AM.jpg) [Focus on FX Execution Connectivity](https://articles.marketsmedia.com/focus-on-fx-execution-connectivity) ![](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/Depositphotos_333839538_L.jpg) [TRACE Turns 20](https://articles.marketsmedia.com/trace-turns-20) 10.05.2016 By Rob Daly Bonds # ETFs May Offer OTC Pricing Insights 10.05.2016 By Rob Daly [Share](https://www.facebook.com/share.php?u=https://articles.marketsmedia.com/etfs-offer-otc-pricing-insights) [Tweet](https://twitter.com/intent/tweet?text=US+ETFs+Have+Record+Net+Inflows&url=https://articles.marketsmedia.com/etfs-offer-otc-pricing-insights) [Share](https://www.linkedin.com/cws/share?url=https://articles.marketsmedia.com/etfs-offer-otc-pricing-insights) As demand for exchange-traded funds continues to heat up, a debate continue over whether market participants can use ETF pricing as a useful price-discovery tool for the instrument’s less-liquid components. “There has been a record investment in ETFs over the last few years, and an increasing number of institutions are trading these securities,” said Adam Gould, head of US equity derivatives at Tradeweb. Since launching its US ETF market in the first quarter of this year, Tradeweb has seen 18 market makers and more than 135 participants trade more than $12 billion of notional volume on its electronic request-for-quote platform. However, Gould sees clients using the platform to move in and out of positions to support their investing strategies but not as a price discovery mechanism for their underlying components. “There’s significant liquidity in corporate bond ETFs, and clients use Tradeweb to access the liquidity they need.” On the other hand, Rick Redding, CEO of the industry advocacy group Index Industry Association, sees investors benefiting from the broader participation in ETF trading on the exchanges and other trading venues. “I think that is what is happening *de facto* is that people are looking to those because of the market prices ETFs in real-time,” he said. “There’s a reason for a price to be quoted to the broader public. It’s not the fact that there’s an ETF. It is that the ETF is focusing people’s attention on that price.” Bond dealers know where the bond market is trading and not trading, he added. “Now more people can see the ETF quotes quicker than Trace trade updates, and that is why I’m saying that ETFs are almost becoming a price discovery mechanism for people.” Redding admits that it relying on ETF pricing would be an imperfect tool since there is only so much “equitization” that can be applied to the corporate bond and other over-the-counter markets. **More on ETFs**: - [ICI Reports Estimated ETF Net Issuance](https://www.marketsmedia.com/ici-reports-estimated-etf-net-issuance-14/) - [New Goldman Sachs Low-Duration Treasury ETF Offers Cash Alternative](https://www.marketsmedia.com/goldman-sachs-low-duration-treasury-etf-offers-cash-alternative/) - [Exchange Operator Bats Shifts Payments to Market Makers for ETFs](https://www.marketsmedia.com/exchange-operator-bats-shifts-payments-market-makers-etfs/) [Share](https://www.facebook.com/share.php?u=https://articles.marketsmedia.com/etfs-offer-otc-pricing-insights) [Tweet](https://twitter.com/intent/tweet?text=US+ETFs+Have+Record+Net+Inflows&url=https://articles.marketsmedia.com/etfs-offer-otc-pricing-insights) [Share](https://www.linkedin.com/cws/share?url=https://articles.marketsmedia.com/etfs-offer-otc-pricing-insights) ![email](https://articles.marketsmedia.com/hubfs/Markets%20Media/email.svg) ### NEWSLETTER SIGN UP And receive exclusive articles on securities markets ### Related articles 1. 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