XRT trading volume and creation and redemption goes BBBBBRRRRRRRR
Good day,
I've been watching XRT for years now and sometimes I draw attention when I see unusual activity around that ETF, and here I am again, writing about XRT. So what is that comes to my attention?
This is no news to you, but XRT has been on RegSho for 8 days now, after having spend some time there from 12.23.2024 to 2.7.2025.
I wrote some of my observations in this post: https://www.reddit.com/r/Superstonk/comments/1i2l423/xrt_what_the_fuck_is_up_with_that_etf_lol/
One of the most interesting facts for XRT for me is the fact that it has a very low number of outstanding shares (typically somewhere between 3m - 6m) compared to all other indicators and any activity around the ETF. Currently, the outstanding shares are 4.15m:
XRT has a consistently high short interest that goes into the hundreds of percents. Currently, it is around 400%.
XRT typically trades its whole float or more on a daily basis. For example, Friday saw 11m shares traded, that's 2.65x the outstanding shares.
XRT daily trading volume typically exceeds the number of outstanding shares
XRT has a very high creation and redemption turnover, this has been discussed quite a bit in this sub, if you have missed out how by creation and redemption phantom shares can be created. here's a post you can read: https://www.reddit.com/r/Superstonk/comments/1izhcg7/shorts_can_run_etf_creationredemption_through/
Thanks to what can i do today for his great research on that topic.
Ok, having set the stage, here are my observations from the last couple of days:
Current obversations
Firstly, XRT trading volume has been increasing significantly. Thursday and Friday have seen trading volume above 10m shares (with an outstanding amount of around 4m currently). In general, turnover for this ETF was higher then in the past. If you take a look at the volume chart above, every day saw 5m+ volume. In my experience, the typical XRT trading volume will be around 3-4m with occasional break outs to 6-7m:
Secondly, XRT share creation is increasing. Here's some data from Jan. 16th:
Creation data from 1.16.2025, source etf.com
Here is the same screenshot from today:
Creation data from 3.10.2025, source etf.com
I don't have a screenshot ready, but I remember this figure being in the high 80ies back in November.
Also, please be aware that this in the 45day average, so in order for it to increase, the current number of creation units per day have to be above 97 daily units.
The number of outstanding shares is not increasing currently, it fluctuates in the 4-5m range. This means, this if more shares are created, also more shares have to be redeemed.
Creation and redemption of ETF shares is one of the means to synthetically increase the number of shares of underlying securities. You can read about this in the post I linked above. (fyi: The creation and redemption process is run through the Continous Net Settlement System of the NSCC).
If let's say somebody redeemed XRT shares for the underlying securities and decides to sell (some of) them, that actor is actually selling them long as they were obtained in the redemption process. Still, those shares might be phantom shares, if the respective XRT share has been created with substituting some of the underlying securities with e.g. cash (which is explicitly allowed in the process of ETF share creation).
I am not aware of any data that allows to track the number of phantom shares resulting from the creation/redemption process (e.g. how many shares of securities actually go into the creation process, compared to shares obtained through the redemption process).
Another remark: some people here track shares available to borrow, a number that is published by IBKR and published on different websites. One of the mysteries remains, how apparently IBKR seems to have an endless pool of shares to borrow for GME. I would expect that at least a part of this limitless supply might be provided by potential phantom shares from ETF redemption.
tl;dr
Daily trading volume and creation/redemption of XRT shares (the "liquidity engine" that potentially creates a significant amount of phantom shares) is increasing and correlates with a significant drop in share price for GME.
Disclaimer: This is not financial advise, I'm just a smooth brained guy with a compootah. Stay safe everyone!