If you’ve ever tried to buy or sell shares of the iShares Gold Trust Micro ETF (IAUM), you might have wondered: “How easy is it to actually trade this thing?” This article unpacks IAUM’s true liquidity based on hands-on experience, including average trading volume, bid-ask spread quirks, and what makes IAUM different from more famous gold ETFs—plus a simulated walk-through and insights from industry pros. I’ll also dig into how US and international standards for “verified trade” affect your ability to rely on the ETF’s quoted liquidity, and toss in a comparison table for good measure.
A while back, I was helping a friend diversify his portfolio with some gold exposure, and we zeroed in on IAUM because of its low expense ratio and bite-sized share price. But what caught us off guard was: the liquidity wasn’t as straightforward as we expected, especially compared to something like GLD. If you’re considering IAUM, you’re not alone in wondering—will I be able to trade out efficiently, or will I get nicked by wide spreads and low volume? Let’s see what the data, and a little hands-on trial, say.
First step, I fired up my brokerage platform (Fidelity, for reference) and typed in the IAUM ticker. Here’s what you want to check:
On a random Wednesday morning, the numbers looked like this:
I tried putting in a limit order for 1,000 shares at the bid. At first, nothing filled—the ask was a penny higher. After a few seconds, a partial fill came through, then the rest. Not instant, but not painful. I bumped the order size up to 5,000 shares, and it took a bit longer, but still filled within a few minutes, with no noticeable slippage.
That’s decent—though if you’re used to trading SPY or GLD, you’ll notice the difference. For comparison, GLD had a spread of just $0.01 on a price over $180, and volume in the millions. IAUM is clearly less liquid, but for most retail trades, it’s “liquid enough”—unless you’re moving huge blocks.
Let’s say you’re a small institution, and you bought 50,000 shares of IAUM (about $1 million at current prices). You want out—fast. Here’s what could go wrong:
In practice, you can’t always trust the spread you see—especially outside regular hours or during market stress. I saw a real example on Bogleheads, where a user tried to sell a larger lot and the spread suddenly doubled.
To get a sense of the institutional angle, I reached out to a former ETF liquidity provider. She explained: “IAUM’s underlying asset—physical gold—is extremely liquid globally. But the ETF trades less, and that means market makers are a bit more cautious. They’ll keep spreads tight for small trades, but if they see unusual size, or if gold volatility picks up, those spreads can widen fast.”
She also pointed out that for ETFs like IAUM, the SEC’s ETF Rule (6c-11) means authorized participants can create or redeem shares in large blocks, which helps keep the ETF’s price close to NAV. But this doesn’t always protect retail traders from tactical spread changes in the heat of the moment.
If you’re wondering how “verified trade” is defined, it depends on where you are:
| Country/Region | Name | Legal Basis | Enforcement Agency |
|---|---|---|---|
| USA | Regulation NMS | SEC Final Rule | SEC |
| EU | MiFID II | Directive 2014/65/EU | ESMA/National Regulators |
| Japan | Financial Instruments and Exchange Act | FSA Guidelines | FSA |
| OECD (Guidance) | Best Practices for Market Transparency | OECD 2010 Report | OECD (Advisory) |
So, an ETF like IAUM, listed in the US, follows Regulation NMS rules for reporting and trade verification. That means quotes and reported trades are generally reliable during US market hours, but may lag or be less transparent off-hours or via non-standard venues. In contrast, in Europe, MiFID II imposes stricter pre- and post-trade transparency, but for US-domiciled ETFs, you’re subject to US rules.
True story: I once tried to sell a few thousand IAUM late in the day, thinking “it’s just like GLD, right?” Wrong. The spread was suddenly $0.05 wide, and my market order executed at the lower end, costing me more than I’d expected. Lesson learned: always use limit orders, and check volume first. (And maybe don’t trade thin ETFs right before close.)
Forum regulars at Reddit’s r/investing have had similar stories—some even reporting that pre-market or after-hours spreads can jump to $0.10 or more, making small trades expensive.
Here’s the bottom line: IAUM’s liquidity is “fine” for most retail investors—average daily volume around 350,000 shares, typically a 1-2 cent spread during normal hours, and underlying gold ensures that big institutions can create/redeem shares if needed. But compared to the giants like GLD, it’s thinner, and big trades can move the price.
If you’re trading a few hundred or a few thousand shares, use limit orders, and check the spread and recent volume before placing big orders. For anything larger, consider breaking up your trades, and always keep an eye on how the order book looks.
Regulatory standards in the US mean reported liquidity is generally trustworthy, but don’t ignore the practical realities of ETF trading—especially in less-liquid products. If you’re in Europe or elsewhere, remember that US-listed ETFs like IAUM still play by US rules, even if your local standards are different.
My advice? IAUM works as a low-cost gold ETF for most purposes, but treat it with a little more respect than the big boys. And always double-check before you hit “sell”—experience (sometimes painfully) is the best teacher.