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section header ETF fundamentals

subsection header Trading

How to place an order

A number of factors can influence how you place ETF orders and when you should call an ETF trading desk for assistance.

Scenario 1:

You want to execute your trade right away

Whether you want to lock in a current market price, avoid adverse market movements, or simply execute your daily trades and move on to other priorities, the key to determining your trading approach is understanding the effect of trading volume.


If the ETF you want to trade has a high average daily volume (ADV) relative to the size of your order, you can likely execute a simple limit order through your trading site. If your order size is large relative to ADV, it may be better to contact your ETF trading desk for assistance.


Keep in mind that your ETF trading desk has access to an extensive network of liquidity providers that can help place your order and execute your trade, especially in low-volume situations.


Scenario 2:

When you want to work a large order over time


When your order size is small relative to ADV, you can likely execute your trade using simple limit orders through your trading site over your desired time period.


When your order size is large relative to ADV and your objective is to minimize market impact, your best option is to have the ETF trading desk work the order and assist with more sophisticated order and execution strategies, including:


Β·    Time-weighted average pricing (TWAP), which provides an average price of a security over the course of a specified time.

Β·     Volume-weighted average pricing (VWAP), which provides an average price of a security based on its trading volume across various price points.

TWAP and VWAP strategies ensure your trade will be executed not at the lowest or the highest price but at an average of the two during the specified period of time.



Be aware of special circumstances

There are occasions when executing a large order for an ETF may have a market impact. Under this circumstance, your ETF trading desk can be especially helpful in determining an appropriate trading strategy, sourcing additional liquidity and seeking indicative offers from multiple brokers to generate a level of competition that can result in a favourable trade.


Learn the basics of ETFs, including their history, how they compare to mutual funds, what types are available and more.


Learn about the different types of exchange-traded products, how index and active ETFs are managed and more.


Learn about strategic and tactical uses for ETFs, including asset and sub-asset allocation, portfolio completion, cash equitization and more.

Commissions, management fees, and expenses all may be associated with investment funds. Investment objectives, risks, fees, expenses, and other important information are contained in the prospectus; please read it before investing. Investment funds are not guaranteed, their values change frequently, and past performance may not be repeated. Vanguard funds are managed by Vanguard Investments Canada Inc. and are available across Canada through registered dealers.

This material is for informational purposes only. This material is not intended to be relied upon as research, investment, or tax advice and is not an implied or express recommendation, offer or solicitation to buy or sell any security or to adopt any particular investment or portfolio strategy. Any views and opinions expressed do not take into account the particular investment objectives, needs, restrictions and circumstances of a specific investor and, thus, should not be used as the basis of any specific investment recommendation. Investors should consult a financial and/or tax advisor for financial and/or tax information applicable to their specific situation.

All investment funds, including those that seek to track an index are subject to risk, including the possible loss of principal. Diversification does not ensure a profit or protect against a loss in a declining market. While the Vanguard ETFs are designed to be as diversified as the original indices they seek to track and can provide greater diversification than an individual investor may achieve independently, any given ETF may not be a diversified investment.

All monetary figures are expressed in Canadian dollars unless otherwise noted.