(July 25 – 17:10 ET) – The Wall Street Letter reports that the American Stock Exchange is thinking of adding seats to accomodate all the interest in its hot exchange-traded funds.
ETFs, or exchange participation units, are being touted as the next big retail investment product here in Canada, and they are already thriving south of the border. The Amex is the central trading exchange for the products that offer index performance at far lower cost than index funds, along with the advantages of equities, such as leverage and short-selling.
WSL says that the Amex is now looking to add seats to allow membership for more firms on its floor, while beefing up its own volume and enhancing liquidity. There are currently over 500 members at the exchange, including 203 options-only members.
The price of a seat has been rising rapidly in recent months as brokers clamour for some of the action in ETFs. The last seat sold for US$750,000 last week, up from US$500,000 in March.
The Amex just listed a slew of new ETFs from Barclays Global Advisors, and it is expecting many more in coming months. The ETF trend is also expanding here in Canada. Barclays Global Investors Canada already has a couple of iUnits products trading on the TSE, and will shortly add a couple of bond funds. As well, since the TSE and S&P recently announced four new sector indexes for the fall, it’s expected that products on those indexes will be out soon after, too.
-IE Staff