How are ETF shares created and redeemed? Don’t worry—the class rep is here to explain:
When creating shares, authorized participants deliver cash or the corresponding assets to the fund in exchange for a whole batch of new shares; redemption works the other way around.
When the premium or discount gets too large, authorized participants can arbitrage by creating or redeeming shares, pushing the trading price back toward the net asset value.
Knowledge may seem useless most of the time, but when you hit a pitfall, you’ll appreciate having it.
$BTC 81626.36（-0.72%）
#BTC
When creating shares, authorized participants deliver cash or the corresponding assets to the fund in exchange for a whole batch of new shares; redemption works the other way around.
When the premium or discount gets too large, authorized participants can arbitrage by creating or redeeming shares, pushing the trading price back toward the net asset value.
Knowledge may seem useless most of the time, but when you hit a pitfall, you’ll appreciate having it.
$BTC 81626.36（-0.72%）
#BTC