RT Journal Article SR Electronic T1 ETFs, Swaps, and Futures: Trade at Index Close (TIC) and the Coevolution of Financial Markets JF ETFs and Indexing FD Institutional Investor Journals SP 50 OP 58 VO 2009 IS 1 A1 Guillermo Cano A1 Barry Feldman A1 Joseph Smith YR 2009 UL http://guides.pm-research.com/content/2009/1/50.abstract AB Trade at Index Close (TIC) is a new futures order type that allows futures contracts to be traded at a price relative to the close of an underlying cash (e.g., equity or fixed income) index. TIC allows a significant reduction in the tracking error risk associated with using futures to obtain market exposures. This risk reduction could allow some ETF sponsors using derivatives-based architectures to shift from using swaps to using futures when futures contracts that deliver the proper exposures are available. This could facilitate the introduction and growth of new futures contracts as well. ETFs obtaining market exposures through futures contracts will have lower costs, increased transparency, and lower levels of counterparty risk. The expansion of the breadth of futures markets will reduce the cost of swaps and allow swap providers to more economically deliver targeted exposures.