ETF creation and redemption explained in three sentences:
ETF shares trade in two markets: ordinary investors buy and sell existing shares on exchanges, while authorized participants (APs) create and redeem shares with the issuer in the primary market.
When the premium or discount gets too large, APs can profit from the price difference by creating or redeeming shares, and this arbitrage pushes the trading price back toward the net asset value.
When tracking ETF fund flows, focus on the cumulative trend over several weeks; large inflows or outflows on a single day may just reflect an individual institution rebalancing its portfolio.
$BTC 77379.29（-0.49%）
You bear the risk; I’m just sharing my thoughts.
ETF shares trade in two markets: ordinary investors buy and sell existing shares on exchanges, while authorized participants (APs) create and redeem shares with the issuer in the primary market.
When the premium or discount gets too large, APs can profit from the price difference by creating or redeeming shares, and this arbitrage pushes the trading price back toward the net asset value.
When tracking ETF fund flows, focus on the cumulative trend over several weeks; large inflows or outflows on a single day may just reflect an individual institution rebalancing its portfolio.
$BTC 77379.29（-0.49%）
You bear the risk; I’m just sharing my thoughts.
