What factors can affect the spread of an ETP?
One of the most important factors is the investment or index that an ETP follows - spreads tend to be higher if these are smaller or less frequently traded. Larger, more frequently traded ETPs may have lower spreads but the spread tends to increase when markets are more volatile. The spread varies over time and is not predictable - spreads are often highest shortly after the stock market opens and shortly before it closes. The spread on many ETPs is reduced mid-afternoon when the US stock market is open.