ETF Trading

How do ETFs affect prices in markets?

Project title

ETF Trading Experiments (HREC 24368)


The aim of this investigation is to determine what impact the availability of Exchange Traded Funds (ETFs) has on prices and choices in financial markets. An ETF is a fixed basket (portfolio of securities) that trades alongside the securities in the basket. Special authorised traders ensure that the price of the basket is in line with the prices of the component securities.

For this purpose, we will conduct a controlled market experiment.

This project has been approved by The University of Melbourne’s Human Research Ethics Committee.

What will I be asked to do?

Should you agree to participate you will complete a trading task whereby you exchange securities with other participants in an online financial market. The aim of the task is to acquire a combination (portfolio) of securities in order to obtain payoffs with a trade-off between risk and reward that you desire. There will always be three securities (two risky and one risk free). At times, there will also be an ETF, with payoff equal to a pre-announced combination of the payoff of the two risky securities. The estimated time of commitment will be about 2.5 hours. Participation in this study is completely voluntary and the information collected will remain confidential. You will receive between $40 and $60 for your participation, depending on the (random) payoffs on the risky securities and ETF. You can reduce risk by diversifying across securities, but this may come with a reduction in expected payoff. It is up to you to choose a portfolio with your desired risk/return payoff.

How will my confidentiality be protected?

This is a de-identified study. We will protect the confidentiality of your responses to the fullest possible extent, within the limits of the law. Only participant codes will be used in the storage of data. The data will be kept securely by the Department of Finance for a maximum of five years from the date of final publication.

How will I receive feedback?

Results of the study will be available from the researchers’ websites, be presented at conferences and be published in peer-reviewed journals.

Will participation prejudice me in any way?

Please be advised that your participation in this study is completely voluntary. Should you wish to withdraw at any stage, or withdraw any unprocessed data you have supplied, you are free to do so without prejudice. If you are a student at the University of Melbourne, your grades will not be affected if you participate, decline to participate or withdraw from this project at any stage.

Where can I get further information?

If you would like to receive more information about the project, please contact the researchers at or 03 9035 9950.

This research project follows the guidelines of the National Health and Medical Research Council Statement on Human Experimentation. It has been approved by the Human Research Ethics Committee of The University of Melbourne. If you have any concerns or complaints about the conduct of this research project, which you do not wish to discuss with the research team, you should contact the Manager, Human Research Ethics, Research Ethics and Integrity, University of Melbourne, VIC 3010 (phone: +61 3 8344 2073, email: All complaints will be treated confidentially. In any correspondence please provide the name of the research team or the name or ethics ID number of the research project.

How do I agree to participate?

If you decide to participate and are aged between 18 and 35 years old, please sign up for an experimental session here.

Human ethics approval

This study has been approved by the University of Melbourne Human Research Ethics Committee (project ID: HREC 24368).

Centre for Brain, Mind and Markets
Department of Finance 
The University of Melbourne 
Victoria 3010  
Phone: +61 3 9035 9950