I hate leveraged shares.
Other competitors dont have such extreme spreads (granite shares for example)
What happens with leveraged shares is when the underlying price spikes the buy prices increase but the sell prices stay flat. When the buy price starts reducing the sell price slowly creeps higher. Can’t believe they get away with it.
I also tend to use Granite over Leverage when possible.
Yep, since these are world’s first long and inverse leveraged trackers of ARKK, the spreads should improve over time as volume picks up. Keep me in the loop in case things don’t improve please, I’ll be following up with the market maker(s).
Should the spread not depend on the liquidity of the underlying?
When each issuer brings an ETF/ETP to market, they need to have at least one dedicated market maker to provide quotes throughout the trading day. As volume picks up, other market makers usually enter (competing for flow) and there’s also natural flow from other traders getting in and out of positions. This increased competition leads to tighter spreads as the market makers need to offer better prices to attract business.
For example: check out the chart below, where you can see that ETPs provided on the same underlying don’t necessarily have the same spreads. For example, TSL3 was the ETP with the most number of transactions in the month of December and this is reflected in its (relatively) tighter spread. Info is from the LSE’s site*.
