How Market Makers Adapted to Complex ETFs

Jeff sits down with Gavin Filmore of Tidal for a deep dive into why, even after three decades, the ETF industry is still, potentially only in the “second or third inning.” Gavin walks through the evolution from simple, passive equity ETFs to today’s surge in active and derivatives-based products, explaining how his experience running an oil ETN through the negative-oil shock convinced him of the importance of flexibility over rigid index rules. They break down how market makers and regulation (like 6c-11 and the derivatives rule) have reshaped the landscape, why semi-transparent ETFs fizzled, and how white-label platforms like Tidal have ridden this innovation wave to roughly $80 billion across hundreds of largely active funds. Jeff and Gavin also get tactical on what it really takes to launch and grow an ETF now, from differentiated “white space” ideas and realistic AUM milestones, to operating capital, distribution strategy, and the contrasting roles of grassroots retail demand versus platform-driven institutional flows, before looking ahead to areas like prediction markets and single-stock futures as the next potential frontiers.

Chapters:

00:00-01:12=Intro

01:13-3:51=Early Innings: Gavin’s New York Roots and ETF Growth Setup

3:52–13:30 = Active ETFs, Derivatives, and Why the ETF Boom Is Still Early

13:31–21:48 = Why Derivatives Need Active ETFs: Oil Going Negative, Flexibility, and Hidden ETF Plumbing

21:49–32:57 = Market Makers, Liquidity Myths, and the Hidden Frictions of ETF Trading

32:58–44:13 = Building Tidal: Inside a White-Label ETF Platform Built on Active and Derivatives

44:14–01:02:12 = How to Launch an ETF: Capital, Distribution, Retail vs. Institutional, and Platform Hurdles

01:02:13-01:13:40 =  Prediction Markets, Single-Stock Futures, and the Next Frontiers for ETFs

01:13:41-01:19:16 =  ETF Inning Count, Industry Outlook, and Parting Shots

Follow along with Gavin and Tidal on LinkedIn and be sure to check out tidalfinancialgroup.com for more information!

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