Quote Originally Posted by Thor View Post
Hi Dean,

I have a question about the mechanics of ETFs. Specifically around the market maker and liquidity.

1. When I look at the depth of say the MDZ, why are there apparent two sets of buy / sell prices of different volumes from what I assume is the market maker. In the case of MDZ I see a buy / sell volumes of 45,000 and 100,000 on both buy and sell sides.

2. Is the market maker autonomous or is there a human behind this? If I sell 100,000 shares, will another 100,000 shares be placed on the market for sale immediately?

3. If I try to sell 500,000 shares at the market maker price, because there is only ever 100,000 on the buy side, what happens? Will the market maker buy them all at once? Will it be immediate or does a human get involved?

4. In relation to question 2 and 3 - What happens during a liquidity event when there are a large number of sellers? How does the market maker handle this when the underlying asset values might be dropping significantly intraday.

I like the Smartshare offering, and during the normal market conditions I can see everything works fine, but I want to be clear what happens during a crisis.
Great questions, cheers for asking. I was wondering the samething & look forward to their answer.