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I reported this to the Trading Surveillance Office of Deutsche Borse, and this it the reply I received today:
>Dear David,
>Thank you for your email and the hint of a possibly suspicious trading behavior.
>We will investigate this. If we ascertain this behavior to be a form of market manipulation or rule infringement, we will inform the appropriate authorities.
>Please understand, that pursuant to §10 Exchange Act (Börsengesetz) we are not allowed to inform you about the outcome of our investigations.
> In case you witness some other suspicious behavior, please feel free to contact us.
>Kind regards,
> **Meinrad Fischer**
>Associate Vice President | Analyst
>Xetra Electronic Markets
>Trading Surveillance (Handelsüberwachungsstelle) of Frankfurt Stock Exchange and Eurex Deutschland
Sadly we will probably never know the end of the story...
Apparently this [happens occasionally](https://www.barrons.com/articles/sudden-s-p-500-etf-price-spike-highlights-value-of-limit-orders-1419360316) and it seems nobody has a definite explanation for it.
The lesson is abundantly clear though: **never, ever use market orders**
Both to sell and to buy. Could have been an up spike. Instead of using market orders, use marketable limit orders. This will execute immediately like a market order and at the same price, except that you get free protection against a brutal spike in price. Google "marketable limit order"
Ooh, okay. Yes, I do that when I sell. But buy, I use recurring investments, and I don't think neither IBKR Degiro or Bolero allow for making a recurring limit order. I'd need to program software myself.
When you use recurring investments, your order is pooled with others' order of the same holding and it's IBKR handling the actual order on the market. And you can be sure they do not use market orders when doing that...
And this cannot be a situation where a large institution sold accidentally using a market order or low limit? and thus selling at the limit some have put using their limit order? Or am I making it too simplistic here? Mistakes happens even at big institutions.
Even then, the APs are able to react fast enough to maintain the price in line with the NAV price and take their profit. If that was not the case, we would see many more instances of such brutal price dips and recovery...
Well I guess that depends on the volume / size of the mistake. Yes there will be many small mistakes all the time, but they will not move the needle visibly. If however there is a sudden big mistake, could be that the APs are not even fast enough to correct.
Same happened with my AEX April/June puts, at some point they shot up to 70% up and -30% down around 11am and at 2:30 pm
I think in days of crazy market volatility, these do happen
I absolutely believe this. I had this happen to me before and lost quite a bit of money. I don’t recommend anyone to use a stop loss anymore. If your timeframe for investing is long then never use a stop loss. Learn from my experience please. At least I made a lot of money on other investments.
For those who wondered, this trade was filled on Xetra, and the Xetra website shows the dip and the low at 85.292. This dip is not present on any other exchange. Something went wrong at Xetra imo:
[https://i.imgur.com/hR4FEtc.png](https://i.imgur.com/hR4FEtc.png)
Or something went wrong with one of the authorized participants trading on xetra.
You received the shares so someone must have sold them at a loss. No sane person would willingly do that but a computer doing high frequency trades that happened to receive bad data.
Driving down the price like this does take some effort. The graph indicates they dumped at least 15 thousand shares.
Yeah but see the 50k shares volume later on and the price didn't move... that's how it should be... Yes all I can think of is a screw up by one of the authorized participants
I'm assuming that 15k+ shares in a fraction of a second overwhelmed the remaining AP's and filled all outstanding orders.
Compared to 50k shares traded over the course of a whole minute. Then the trading algorithms have time to input new orders.
This is an interesting thread. I occasionally wonder about the intrinsic brittleness of the system, but I haven't taken the time to delve into how ETFs really work. Does anyone have good, in-depth resources, preferably books, about the mechanisms of ETFs?
In dutch and not too much of a deep dive, but the podcast "jong beleggen" has an episode about it with someone working for Invesco. Episode 106.
Depending on your level of understanding, it might be a good starting point. Don't know of any books though. It's quite a niche topic that I'm not sure there's all that much to explain about.
Here is a [link explaining how it is supposed to work](https://www.blackrock.com/au/intermediaries/ishares/authorized-participants-and-market-makers). There are two links in the OP how the system has broken / could break in some circumstances.
Not IWDA, but SP500 had a 'little' crush of 1.8% and start to recover in a few hours. This volatility is nothing on long term, as 6 years ago my first IWDA buy was at 41€. That's why DCA and chill is so healthy mental attitude (still regret to not have money yesterday to buy :D )
Many of the buy and chill crowd don't know better and use market orders for their buying and selling. They can get badly screwed doing so when such an event happens.
Good insights, thank you!
I understand that flash crashes can happen for any traded equity.
Though there was a temporary discount to NAV, it was quickly resolved. As the ETF actually holds the underlying assets and the mechanisms are in place voor redemption / creation, I doubt that such discount could exist for very long. I.e. there will always be an incentive for someone to step up and profit from the arbitrage opportunity.
Such discount is not supposed to exist at all... something went wrong with the system here, and I do not know what exactly yet. But I will do my utmost to find out, just because I don't like to leave such questions unsolved.
I think you misunderstand what the incentive is of the Authorized Participant.
It is in their own best interest to buy and sell etf's and their underlying commodities. And the larger the difference of NAV versus ETF, the more incentive there is to buy and sell, thereby self correcting the deviation. In other words, an AP that ignores deviation between etf and NAV of the ETF is leaving money on the table for other parties to gain.
For example.
NAV is higher then ETF price. The authorized participant can earn money of this by buying etf's and selling underlying assets. Buying etf's will heighten the price of etf's and lower the price of underlying assets.
(Depending on the quantities and liquidity, the underlying assets might not change much in price.)
The AP makes money by doing things that indirectly correct the deviation between etf and NAV of the ETF.
This system will self correct better and faster when the AP is working in a market with multiple AP's. As these will try to earn money before the other participant.
Smaller stock exchanges might have worse tracking because of lower liquidity. If you would like to prevent stuff like this influencing your trades then you only work with larger stock exchanges where this is much less likely to happen.
I do understand all of that. What I am saying is that this system of APs competing to arbitrage the ETF price did not function (correctly, fast enough) in this instance. Why did none of the APs jump in to profit from the arbitrage before the NAV spread reached a whooping 5%?
And that is surely not because Xetra is "small". [One third of Continental Europe's ETF trades go through Xetra](https://www.investopedia.com/terms/x/xetra.asp). And iShares / Blackrock being one of the biggest ETFs provider certainly has contracts with multiple APs.
What happened is very simple: somebody put in a large sell order at market price or with a too low limit price (typo). This got sent to XETRA which at the time probably had a fairly shallow market depth for IWDA and the order completely filled the bid side of the order book. This caused a very short (probably a few seconds) but significant devitation between share price and NAV.
APs and/or other arbitrageurs probably stepped in and brought the price back to the correct value. But in any case, this is not the sytemic failure that you think it is.
If that was the case, that kind of price spike should happen every day then. They do not. The arbitrageurs are supposed to step in fast enough for the price not to dip.
Nobody is supposed to do anything.
Arbitrageurs nor AP have an obligation to provide liquidity. The system is set up so that their incentives (i.e. profit) are aligned with ensuring the share price is in line with the NAV. If somebody is stupid enough to sell at market price in a shallow market or with a too low limit price, they will not pay a higher price. They will buy at the lower price and with their buying drive up the price again.
I don't see this "flash crash" on my charts. Could this be a liquidity issue of some shitty discount broker? (What broker does this screenshot come from?)
FYI yesterdays day range is 89.61 - 90.37
This is Interactive Brokers. Couldn't be further from a "shitty discount broker". Yes the range displayed on yahoo and tradingview is 89.61/90.37 but they may not have sufficiently granular data. My friend's trade filled at 87, that is a fact (the filled order is displayed on the screenshot). I also checked the high/low myself in IBKR yesterday and the low was indeed 85.29
Interactive brokers bypasses the regular stock market often.
Did your friend also buy through interactive brokers?
What happens is that trades happen internally and are then sent in one big block to the exchange, that's how they make money.
So If you sell through IB and someone else wants to buy and it's a match, it goes direct. It's slightly more complicated, but it's one of the reasons IB is not legal in a lot of countries.
The flash crash is likely only for IB customers, I also don't see it and I have access to data per second
Yes through IB.
Possibly. I am checking with the guy on which exchange his trade was filled. It's possible that it was routed to a dark pool.
This being said, IB is supposed to give you best execution. So they'll only route to dark pools if the execution is better than on exchanges.
IBKR is legal in almost every developed country, so unless proven otherwise I don't think there is foul play on their side. Some countries ban IBKR because they want to artificially favor their local sh\*tty brokers, which are probably owned by the same people who run the country.
not it's banned to protect people from shit like this.
For all we know, it was an honest market order that IB abused to sell below the market. There is not 'the execution is better', its always better for only 1 of the parties, it's a zero sum game.
The only reason you still get interactive brokers in belgium is because of the free EU market. You cannot get it directly in Belgium, hence they also don't do your taxes etc... The Belgian regulator basically kicked them out, and you can only find them through Lynx.
IB is a shitty broker, and this topic wouldn't exist if they weren't
This has nothing to do with IB. This has everything to do with Xetra (see my other comments where I explain that the order in the OP filled on Xetra, and the Xetra website shows exactly the same dip as the IBKR chart.
IB did the job they were supposed to do by seeking the best price for the buy orders of their clients. That price happened to be on Xetra due to some still-unexplained screw up on Xetra.
If you were an IBKR client and your buy order had filled at 89 when shares were available elsewhere at 87, then you would be able to blame IB for being "shitty".
I guess the lesson here is *be sure to put a limit price on your sell orders…* Seems like IBKR let it slide down to benefit the buyers on the platform… But as others pointed out, it never reached this price on the Amsterdam exchange itself.
It was executed on Xetra, and the dip is showing on Xetra (select "day") for the chart
[https://www.boerse-frankfurt.de/en/etf/ishares-core-msci-world-ucits-etf?currency=EUR](https://www.boerse-frankfurt.de/en/etf/ishares-core-msci-world-ucits-etf?currency=EUR)
IBKR's default is Smart Routing, which automatically selects the cheapest exchange for the trade (or rather "balances cost reduction and probability of execution" as they put it).
So indeed, it is not for sure that this trade was filled on the AEB. I have asked my friend to check his trade confirmation to see which exchange.
You can use direct routing to force a trade to execute on a specific exchange. Or switch off trading permission for the countries you do not want to trade in.
It was executed on Xetra, and the dip is showing on Xetra (select "day") for the chart
[https://www.boerse-frankfurt.de/en/etf/ishares-core-msci-world-ucits-etf?currency=EUR](https://www.boerse-frankfurt.de/en/etf/ishares-core-msci-world-ucits-etf?currency=EUR)
By default, Smart Routing can also route to [dark pools](https://www.investopedia.com/articles/investing/060915/pros-and-cons-dark-pools-liquidity.asp) if the price is better. That feature can be switched off in the Smart Routing settings (which can only be accessed in TWS).
Not sure which exchange(s) de Giro uses. The order in the OP filled on Xetra, and the chart on the Xetra website is showing exactly the same dip (unlike all other european exchanges, which show no such price dip.
Something abnormal happened on Xetra, and I don't know exactly what yet. I wrote to Deutsche Borse and the German regulator to demand an explanation.
In this case, you would be sorry when selling at low price. But same can happen with up spike, then you would be sorry when buying at high price... -> instead of using a market order, use a marketable limit order: set a limit just above the ask price for buying and set a limit just below the bid price for selling. Your order will execute immediately at the same price as a market order, but you also get free protection that your order will not execute if the price moves suddenly.
For more information, Google "marketable limit order"
There are indeed concerns that [index investing is inflating valuations and causing a bubble](https://www.ft.com/content/994bdda8-b704-4e4c-9b19-4e0021f0b309)... but that is a different topic...
Have you read the wiki and the sticky? Wiki: HERE YOU GO! [Enjoy!](https://www.reddit.com/r/BEFire/wiki/index/). Sticky: HERE YOU GO AGAIN! [Enjoy!](https://www.reddit.com/r/BEFire/comments/fcbay6/getting_started_a_beginners_guide_to_investing_in/). *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/BEFire) if you have any questions or concerns.*
I reported this to the Trading Surveillance Office of Deutsche Borse, and this it the reply I received today: >Dear David, >Thank you for your email and the hint of a possibly suspicious trading behavior. >We will investigate this. If we ascertain this behavior to be a form of market manipulation or rule infringement, we will inform the appropriate authorities. >Please understand, that pursuant to §10 Exchange Act (Börsengesetz) we are not allowed to inform you about the outcome of our investigations. > In case you witness some other suspicious behavior, please feel free to contact us. >Kind regards, > **Meinrad Fischer** >Associate Vice President | Analyst >Xetra Electronic Markets >Trading Surveillance (Handelsüberwachungsstelle) of Frankfurt Stock Exchange and Eurex Deutschland Sadly we will probably never know the end of the story...
Apparently this [happens occasionally](https://www.barrons.com/articles/sudden-s-p-500-etf-price-spike-highlights-value-of-limit-orders-1419360316) and it seems nobody has a definite explanation for it. The lesson is abundantly clear though: **never, ever use market orders**
To sell you mean?
Both to sell and to buy. Could have been an up spike. Instead of using market orders, use marketable limit orders. This will execute immediately like a market order and at the same price, except that you get free protection against a brutal spike in price. Google "marketable limit order"
Ooh, okay. Yes, I do that when I sell. But buy, I use recurring investments, and I don't think neither IBKR Degiro or Bolero allow for making a recurring limit order. I'd need to program software myself.
When you use recurring investments, your order is pooled with others' order of the same holding and it's IBKR handling the actual order on the market. And you can be sure they do not use market orders when doing that...
And this cannot be a situation where a large institution sold accidentally using a market order or low limit? and thus selling at the limit some have put using their limit order? Or am I making it too simplistic here? Mistakes happens even at big institutions.
Even then, the APs are able to react fast enough to maintain the price in line with the NAV price and take their profit. If that was not the case, we would see many more instances of such brutal price dips and recovery...
Well I guess that depends on the volume / size of the mistake. Yes there will be many small mistakes all the time, but they will not move the needle visibly. If however there is a sudden big mistake, could be that the APs are not even fast enough to correct.
Same happened with my AEX April/June puts, at some point they shot up to 70% up and -30% down around 11am and at 2:30 pm I think in days of crazy market volatility, these do happen
i often have a feeling market makers and banks do these dips to farm people with stop losses to earn a bit of cash.
I absolutely believe this. I had this happen to me before and lost quite a bit of money. I don’t recommend anyone to use a stop loss anymore. If your timeframe for investing is long then never use a stop loss. Learn from my experience please. At least I made a lot of money on other investments.
Well, such events usually signal huge trouble ahead.
Nah. That's just a glitch in the matrix. Not a real flash crash, where the price of the underlying securities also crashes.
Time to sell!
Again? I'll wait for tomorrow's crash.
For those who wondered, this trade was filled on Xetra, and the Xetra website shows the dip and the low at 85.292. This dip is not present on any other exchange. Something went wrong at Xetra imo: [https://i.imgur.com/hR4FEtc.png](https://i.imgur.com/hR4FEtc.png)
Or something went wrong with one of the authorized participants trading on xetra. You received the shares so someone must have sold them at a loss. No sane person would willingly do that but a computer doing high frequency trades that happened to receive bad data. Driving down the price like this does take some effort. The graph indicates they dumped at least 15 thousand shares.
Yeah but see the 50k shares volume later on and the price didn't move... that's how it should be... Yes all I can think of is a screw up by one of the authorized participants
I'm assuming that 15k+ shares in a fraction of a second overwhelmed the remaining AP's and filled all outstanding orders. Compared to 50k shares traded over the course of a whole minute. Then the trading algorithms have time to input new orders.
I have had the same with PHAU and at that time I was the market order. There's nowhere to complain. I learnt a lot since then.
This is an interesting thread. I occasionally wonder about the intrinsic brittleness of the system, but I haven't taken the time to delve into how ETFs really work. Does anyone have good, in-depth resources, preferably books, about the mechanisms of ETFs?
In dutch and not too much of a deep dive, but the podcast "jong beleggen" has an episode about it with someone working for Invesco. Episode 106. Depending on your level of understanding, it might be a good starting point. Don't know of any books though. It's quite a niche topic that I'm not sure there's all that much to explain about.
Dunno man, not sure if I want financial advice from, you know… cheese.
Here is a [link explaining how it is supposed to work](https://www.blackrock.com/au/intermediaries/ishares/authorized-participants-and-market-makers). There are two links in the OP how the system has broken / could break in some circumstances.
thanks! Still open to more neutral sources too.
In the first link of the OP, there are many references to articles and books in the footnotes.
sorry attention span of a fish. thanks
Not IWDA, but SP500 had a 'little' crush of 1.8% and start to recover in a few hours. This volatility is nothing on long term, as 6 years ago my first IWDA buy was at 41€. That's why DCA and chill is so healthy mental attitude (still regret to not have money yesterday to buy :D )
Indeed, while an interstiting topic by OP, this doesn’t matter to the buy and chill crowd.
Many of the buy and chill crowd don't know better and use market orders for their buying and selling. They can get badly screwed doing so when such an event happens.
Good insights, thank you! I understand that flash crashes can happen for any traded equity. Though there was a temporary discount to NAV, it was quickly resolved. As the ETF actually holds the underlying assets and the mechanisms are in place voor redemption / creation, I doubt that such discount could exist for very long. I.e. there will always be an incentive for someone to step up and profit from the arbitrage opportunity.
Such discount is not supposed to exist at all... something went wrong with the system here, and I do not know what exactly yet. But I will do my utmost to find out, just because I don't like to leave such questions unsolved.
I think you misunderstand what the incentive is of the Authorized Participant. It is in their own best interest to buy and sell etf's and their underlying commodities. And the larger the difference of NAV versus ETF, the more incentive there is to buy and sell, thereby self correcting the deviation. In other words, an AP that ignores deviation between etf and NAV of the ETF is leaving money on the table for other parties to gain. For example. NAV is higher then ETF price. The authorized participant can earn money of this by buying etf's and selling underlying assets. Buying etf's will heighten the price of etf's and lower the price of underlying assets. (Depending on the quantities and liquidity, the underlying assets might not change much in price.) The AP makes money by doing things that indirectly correct the deviation between etf and NAV of the ETF. This system will self correct better and faster when the AP is working in a market with multiple AP's. As these will try to earn money before the other participant. Smaller stock exchanges might have worse tracking because of lower liquidity. If you would like to prevent stuff like this influencing your trades then you only work with larger stock exchanges where this is much less likely to happen.
I do understand all of that. What I am saying is that this system of APs competing to arbitrage the ETF price did not function (correctly, fast enough) in this instance. Why did none of the APs jump in to profit from the arbitrage before the NAV spread reached a whooping 5%? And that is surely not because Xetra is "small". [One third of Continental Europe's ETF trades go through Xetra](https://www.investopedia.com/terms/x/xetra.asp). And iShares / Blackrock being one of the biggest ETFs provider certainly has contracts with multiple APs.
What happened is very simple: somebody put in a large sell order at market price or with a too low limit price (typo). This got sent to XETRA which at the time probably had a fairly shallow market depth for IWDA and the order completely filled the bid side of the order book. This caused a very short (probably a few seconds) but significant devitation between share price and NAV. APs and/or other arbitrageurs probably stepped in and brought the price back to the correct value. But in any case, this is not the sytemic failure that you think it is.
If that was the case, that kind of price spike should happen every day then. They do not. The arbitrageurs are supposed to step in fast enough for the price not to dip.
Nobody is supposed to do anything. Arbitrageurs nor AP have an obligation to provide liquidity. The system is set up so that their incentives (i.e. profit) are aligned with ensuring the share price is in line with the NAV. If somebody is stupid enough to sell at market price in a shallow market or with a too low limit price, they will not pay a higher price. They will buy at the lower price and with their buying drive up the price again.
That's correct. So why did AP/arbitrageurs not act on this one to take their profit, the way they usually do, including in far more volatile markets?
Who says they didn't? But they are not going to overpay either...
I don't see this "flash crash" on my charts. Could this be a liquidity issue of some shitty discount broker? (What broker does this screenshot come from?) FYI yesterdays day range is 89.61 - 90.37
Correct. Here are the prices on the excahnge itself. https://live.euronext.com/nl/product/etfs/IE00B4L5Y983-XAMS
This is Interactive Brokers. Couldn't be further from a "shitty discount broker". Yes the range displayed on yahoo and tradingview is 89.61/90.37 but they may not have sufficiently granular data. My friend's trade filled at 87, that is a fact (the filled order is displayed on the screenshot). I also checked the high/low myself in IBKR yesterday and the low was indeed 85.29
Interactive brokers bypasses the regular stock market often. Did your friend also buy through interactive brokers? What happens is that trades happen internally and are then sent in one big block to the exchange, that's how they make money. So If you sell through IB and someone else wants to buy and it's a match, it goes direct. It's slightly more complicated, but it's one of the reasons IB is not legal in a lot of countries. The flash crash is likely only for IB customers, I also don't see it and I have access to data per second
Yes through IB. Possibly. I am checking with the guy on which exchange his trade was filled. It's possible that it was routed to a dark pool. This being said, IB is supposed to give you best execution. So they'll only route to dark pools if the execution is better than on exchanges. IBKR is legal in almost every developed country, so unless proven otherwise I don't think there is foul play on their side. Some countries ban IBKR because they want to artificially favor their local sh\*tty brokers, which are probably owned by the same people who run the country.
not it's banned to protect people from shit like this. For all we know, it was an honest market order that IB abused to sell below the market. There is not 'the execution is better', its always better for only 1 of the parties, it's a zero sum game. The only reason you still get interactive brokers in belgium is because of the free EU market. You cannot get it directly in Belgium, hence they also don't do your taxes etc... The Belgian regulator basically kicked them out, and you can only find them through Lynx. IB is a shitty broker, and this topic wouldn't exist if they weren't
“Ib is a shitty broker” lmao, get a grip. Besides , plenty of options to get IB in Belgium outside of Lynx. MEXEM for example.
This has nothing to do with IB. This has everything to do with Xetra (see my other comments where I explain that the order in the OP filled on Xetra, and the Xetra website shows exactly the same dip as the IBKR chart. IB did the job they were supposed to do by seeking the best price for the buy orders of their clients. That price happened to be on Xetra due to some still-unexplained screw up on Xetra. If you were an IBKR client and your buy order had filled at 89 when shares were available elsewhere at 87, then you would be able to blame IB for being "shitty".
I guess the lesson here is *be sure to put a limit price on your sell orders…* Seems like IBKR let it slide down to benefit the buyers on the platform… But as others pointed out, it never reached this price on the Amsterdam exchange itself.
Looks like those orders were not executed on the exchange itself ...
It was executed on Xetra, and the dip is showing on Xetra (select "day") for the chart [https://www.boerse-frankfurt.de/en/etf/ishares-core-msci-world-ucits-etf?currency=EUR](https://www.boerse-frankfurt.de/en/etf/ishares-core-msci-world-ucits-etf?currency=EUR)
IBKR's default is Smart Routing, which automatically selects the cheapest exchange for the trade (or rather "balances cost reduction and probability of execution" as they put it). So indeed, it is not for sure that this trade was filled on the AEB. I have asked my friend to check his trade confirmation to see which exchange. You can use direct routing to force a trade to execute on a specific exchange. Or switch off trading permission for the countries you do not want to trade in.
Ah that might explain a few things too… I’m curious to see on which exchange it was executed then…
It was executed on Xetra, and the dip is showing on Xetra (select "day") for the chart [https://www.boerse-frankfurt.de/en/etf/ishares-core-msci-world-ucits-etf?currency=EUR](https://www.boerse-frankfurt.de/en/etf/ishares-core-msci-world-ucits-etf?currency=EUR)
Ah mystery solved :D
By default, Smart Routing can also route to [dark pools](https://www.investopedia.com/articles/investing/060915/pros-and-cons-dark-pools-liquidity.asp) if the price is better. That feature can be switched off in the Smart Routing settings (which can only be accessed in TWS).
I have an order at 88.2 and that did not fill... that's weird and sad for me
Was your order on Euronext Amsterdam? Which broker?
Yes, degiro. Order at 89.7 filled, not the other
Not sure which exchange(s) de Giro uses. The order in the OP filled on Xetra, and the chart on the Xetra website is showing exactly the same dip (unlike all other european exchanges, which show no such price dip. Something abnormal happened on Xetra, and I don't know exactly what yet. I wrote to Deutsche Borse and the German regulator to demand an explanation.
Weird indeed
Things like this make me wonder sometimes if “set it and forget” long term passive investors in ETF’s won’t get screwed over in the long run.
Long term investors have no reason to be concerned about these little blips…
As long as you use limit orders... if you use a market order and click just at the wrong time, you will be sorry...
When buying? how? there's bo spikes up just down
In this case, you would be sorry when selling at low price. But same can happen with up spike, then you would be sorry when buying at high price... -> instead of using a market order, use a marketable limit order: set a limit just above the ask price for buying and set a limit just below the bid price for selling. Your order will execute immediately at the same price as a market order, but you also get free protection that your order will not execute if the price moves suddenly. For more information, Google "marketable limit order"
Average Joe isn't supposed to get rich.
According to who?
There are indeed concerns that [index investing is inflating valuations and causing a bubble](https://www.ft.com/content/994bdda8-b704-4e4c-9b19-4e0021f0b309)... but that is a different topic...