What One Word Would You be Willing to Tattoo?
Since I was a teenager, I thought about getting a tattoo. My father, a physician, would not so subtly leave articles around the house about people having terrible allergic reactions to tattoos and with a raised eyebrow and commanding voice suggested that could be me.
Over the years, I’ve thought about my potential tattoo and even spent some time on Google checking out designs. The problem was, everything I that caught my eye was someone else’s, and none felt like a perfect reflection of something that I was willing to wear for a lifetime.
Recently, my interest in tattoos has come to the surface again. (Sorry, Dad). I began to wonder if there was an image, word or phrase that I wouldn’t grow tired of in a few months or even a few years.
What One Word is Your Tattoo Word?
It’s powerful to have a word or phrase to set your intention for the year ahead… or an event or any moment in your life. In the past month, I’ve read some impactful pieces from Jacqui Barrett-Poindexter on her three words for the year and Jon Mertz of Thin Difference on his words of intention and action.
Do you have a word for the year ahead?
What if there was a single word for your life and leadership that could transcend the next 12 months and guide you on your path?
Moreover, how would it help you or change you in powerfully positive ways?
Finding Your Forever Word – Your “Tattoo Word” for Your Life and Leadership
The concept of forever feels impossible in a world where everything is temporary. Our average human attention span is somewhere around 8 seconds. The average marriage length in the USA is somewhere between 8 – 12 years. The lifespan of your next tweet? It’s around 18 minutes. A tattoo? Till death do you part (or laser).
Don’t worry. I’m not going to come to your house and drive you to go get your tattoo. But what if…
What do you love?
Who do you love?
What part of me do you need to honor?
What do you need to call forth in my life and leadership?
What part of you do you want to share with the world?
Who are you?
What drives you?
What do you need to remember and you too easily forget?
If you sit with these questions, ideas will start to swirl and take form. I promise.
You may be thinking, “I get a word for the year, but could there really be one for the next 50? Come on.”
I’ve been coaching long enough to know that what people need today, and who they are, evolves over time and well, ink certainly doesn’t. The concept of a forever word or tattoo worthy word is a big one.
In 2014, my word was play. I wanted to let go of stress and have more playful experiences. Am I glad I don’t have the word “play” tattooed on my butt or anywhere else? You bet.
In the last few months I accepted that my ‘forever’ word was within me and not on Google or in the plethora of cool tattoos on Pinterest like a needle in an enormous haystack. Instead of looking endlessly at designs, I closed my laptop and sat with the questions to discover the one word I needed with me 24/7 365 and beyond.
It hit me. I had my answer.
It’s what I have needed to do my whole life (even when I’ve resisted) and will continue to do for the rest of my days.
To me “embrace” simultaneously accepts where I am today and gives faith and courage for the journey ahead. It lets me mindfully love what’s present while still pushing me to change and grow. Moreover, it is the perfect reminder to embrace others for who they are and where they are in this moment too instead of getting annoyed or frustrated that they’re not meeting my subjective bar.
Truthfully, embracing is not something I’ve always done well but know, that to live a life of meaning, and not only of longing or regret, but it’s also what I most need to do.
Yup, my word, my forever word, my tattoo word: Embrace.
What one word do you believe in so strongly you’d be willing to get a tattoo?
Let’s freeze for a moment – I have not gotten inked. Still, I’ve started carrying that word with me everywhere I go – in my wallet on a piece of paper. Yeah, I totally get that’s not permanent, but it’s a start.
You don’t need to jump onto the chair and get inked tomorrow either but knowing that word that you need to and want to carry with you for all of your days is powerful.
So, what's your tattoo word?
Understanding ETF Liquidity and Trading
Written by: ProShares
ETFs offer attractive features—access to a broad range of asset classes, sectors and styles in a liquid, transparent and cost-effective vehicle. But before using that vehicle, it’s helpful to understand how it works, especially the sources of ETF liquidity and the mechanics of trading them. Understanding these points may help you improve execution when buying and selling ETFs.
The Primary Market—Creation/Redemption of ETF Shares
Most investors trade ETFs on stock exchanges in the secondary market. But the actual creation and redemption of ETF shares occur in the primary market, between the ETF and authorized participants (APs)1—the only parties who transact directly with the ETF. The APs’ ability to continuously create and redeem shares allows them to meet the supply and demand needs of investors, making them key liquidity providers in the secondary market.
Creation. This is how APs introduce new ETF shares to the secondary market.
- In-kind—The AP creates ETF shares in large increments—known as creation units—by acquiring the securities that make up the benchmark the fund tracks in their appropriate weightings and amounts to reach creation unit size (blocks ranging from 25,000 to 100,000 fund shares). The AP then delivers those securities to the ETF in exchange for ETF shares.
- Cash—Alternatively, APs can create ETF shares by exchanging the appropriate amount of cash for ETF shares, for what’s known as a cash create. Often, ETF shares are created using a combination of securities and cash.
- The AP then offers the ETF shares for sale in the secondary market, where they are traded between buyers and sellers on an exchange.
Redemption. This follows the same process in reverse.
- The AP redeems ETF shares in large increments—known as redemption units—by acquiring them in the secondary market and transferring them to the ETF in exchange for the underlying securities or cash (or both) in the appropriate weightings and amounts.
The Secondary Market—Costs and Mechanics of Trading ETF Shares
Costs of Trading. In the secondary market, firms that specialize in buying and selling ETF shares—APs or market makers2 (liquidity providers)—trade them to provide market liquidity and make a profit. This profit margin is embedded in the bid/ask spread, which reflects the implicit costs of trading ETFs.
Bid/ask spread is the difference between the bid—the highest price at which a buyer is willing to buy shares—and the ask—the lowest price at which a seller is willing to sell ETF shares. Three key factors impact the bid/ask spread:
- Creation/redemption fees charged by the ETF provider to the AP.
- Spread of the underlying securities—The bid/ask spread and liquidity of the securities that make up the ETF affect the liquidity and the bid/ask spread of the ETF itself. When there are many bids and offers on a security, it is easy to buy and sell, thus the bid/ask spread tends to be tight. When securities are less liquid, the spread is wider, making the cost to acquire them higher. The higher the cost of acquiring the underlying securities, the wider the ETF bid/ask spread.
- Risk or hedging costs—Holding ETFs entails certain risks, which need to be hedged. Liquidity providers use a variety of financial instruments, including futures, options and other ETFs, to hedge this risk. The more instruments they have to choose from, the lower their hedging costs and the lower the bid/ask spread. The higher the risk, the wider the spread.
ETF bid/ask spread = Creation/redemption fees + spread of underlying securities + risk
Executing Large Orders—Tapping Into Deeper Pools of Liquidity
There are two common ways to execute larger trades directly with liquidity providers, both allowing investors to access deeper pools of liquidity than those offered in the quoted secondary market alone:
- Risk trade—A liquidity provider will quote a price for an ETF at a given size. If that price is accepted, the trade is executed and the liquidity provider assumes the market risk of providing the liquidity at execution.
- Create/redeem—For orders that are large enough, it may make sense to work with an AP to create or redeem shares. This type of transaction is usually executed at either the closing market price of the ETF or at the NAV of the ETF plus fees or commissions.
Mechanics of Trading. To fully consider an ETF’s total costs, it is important to understand the dynamics of trading. In general, two types of orders are commonly used to trade ETF shares:
- Limit order—Buy or sell ETF shares at a specified price. One way investors decide at what price to enter a limit order is to look at the IOPV3 as a guidepost. Limit orders may help investors get the best price, but there’s a risk the order will not be filled.
- Market order—Buy or sell immediately at the prevailing price available at the time. With market orders, execution may be faster, but the investor has limited control over the execution price.
While a large number of transactions are executed using limit or market orders, investors often find their order is larger than the quoted market. There may be “hidden” liquidity within the quote that can be accessed in the market using limit or market orders. However, in some cases, it may make sense to execute trades directly through a liquidity provider. How and when to place an ETF order can depend on many factors, including price sensitivity, level of urgency and overall goals for the portfolio. Determining what factors matter most can help determine the best execution strategy.
Questions? Our capital markets experts can help. Learn more about our ETFs here.
1 An AP is a U.S. registered, self-clearing broker/dealer who signs an agreement with an ETF provider or distributor to become an authorized participant of a fund.
2 A market maker is a broker/dealer that buys and sells securities (or ETFs) from its own inventory to facilitate trading in those securities. Most APs are market makers, but not all market makers are APs.
3 IOPV is the Indicative Optimized Portfolio Value—the intraday net asset value of the basket of underlying securities
Investing involves risk, including the possible loss of principal. ProShares are non-diversified and each entails certain risks, which may include risk associated with the use of derivatives (swap agreements, futures contracts and similar instruments), imperfect benchmark correlation, leverage and market price variance, all of which can increase volatility and decrease performance. Please see their summary and full prospectuses for a more complete description of risks. Carefully consider the investment objectives, risks, charges and expenses before investing. This and other information can be found in the prospectus; read carefully before investing; obtain at ProShares.com. There is no guarantee any ProShares ETF will achieve its investment objective.
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