How ETF Creation and Redemption Works
ETF creation and redemption is the primary market retail never sees. How authorized participants swap baskets for shares, and why that loop pins price to NAV.
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ETF creation and redemption is the primary market retail never sees. How authorized participants swap baskets for shares, and why that loop pins price to NAV.
An ETF premium or discount to NAV measures the pricing mechanism more than the portfolio. Here is how the gap forms, and the checks that catch a false alarm.