I found today's Matt Levine's Money Stuff column/newsletter interesting and amusing for his discussion of shadow trading and, in particular, shadow ETF trading. He cites a paper 'Using ETFs to Conceal Insider Trading" that says "...we find significant levels of shadow trading in 3-6% of same-industry ETFs prior to M&A announcements, equating to at least $212 million of such trading per annum." The crime isn't amusing but Levine's writing style sure is:

"I look forward to reading the SEC's first ETF shadow trading enforcement action, though I worry that the complaint will have a paragraph like 'before buying these short-dated call options on the sector ETF, the defendant spent an hour reading Money Stuff for advice on shadow trading.' Don't do that!"

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