Goldman Exit Shows Shortage of ETF Traders Who Make Market Tick
- Issuers are finding it harder to hire lead market markers
- These linchpins manage a fund’s price on the stock exchange
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A shortage of specialized traders who oversee ETF transactions on stock exchanges is threatening the boom in exchange-traded funds.
Issuers complain that it’s becoming increasingly difficult to hire lead market makers, or LMMs, who work to minimize the difference between the prices that buyers are willing to pay and sellers will accept. What’s the problem? With almost 2,000 funds in the U.S., the resources of these traders are wearing thin.