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The market is made up of actual buyers and sellers. It's not crazy to soak up all the buys at your broker, not to mention exit paths if you have to move a billi

• eru 3y ago
  Your broker can route the big order to the exchanges. So that part about the broker is pretty irrelevant. In any case, you are right that you would want to be careful about moving a billion dollars into S&P500 all at once. But that doesn't mean you shouldn't invest in an index ETF. So there's a difference in how much your position affects the overall market, and how much getting in and out of the position quickly would affect the overall market. You can have a look at the daily volumes of the relevant ETF to get an estimate. SPY seems to have a daily volume of dozens of billions of dollar traded. So a single billion over a day might not actually make that much of a difference. Btw, if you just give the market enough credible warning, you can just route the order via an exchange. People will prepare positions and jostle to be your counterpart.
  • bsdpufferfish 3y ago
    > you can just route the order via an exchange. You certainly can, this is just where you start moving the market. If your broker has to make a call for you, the price to fill your orders is dropping fast.