3 thoughts on “How to operate ETFs in the first and secondary markets, arbitrage”

  1. ETF Fund, that is, exchange trading funds, is an open fund that can be listed and traded on the exchange.
    This fussing mechanism was considered when designing. Because it can be purchased through cash or through a basket of stocks, there will be some cost differences in the two different ways. As long as the difference reaches a certain degree, investors can achieve risk -free arbitrage.

    . For example, a certain major stocks have suspended trading due to major benefits such as stock reform or reorganization. You can buy ETF funds by purchasing ETF funds, and you can achieve profit when selling trading. If you buy the day before the resumption, it can be said to be risk -free arbitrage.
    Sometimes a certain constituent stock suddenly daily limit, and ETF funds often have not been reflected in time. If you seize a short chance, you can achieve arbitrage.

    This Reminder:
    1. The above explanation is for reference only, no suggestions.
    2. There is risk in entering the market, and investment needs to be cautious. Before you make any investment, you should ensure that you fully understand the investment nature of the product and the risks involved. After you understand and evaluate the product in detail and carefully evaluate the product, you will judge whether you participate in the transaction.
    This response time: 2022-01-30, please refer to the official website of Ping An Bank.

  2. Answer: ETF is also known as exchanges trading funds (), which is a special type of open funds. It integrates the advantages of closed funds and open funds. Investors can buy and sell ETF shares in the secondary market, but also to purchase and redeem ETF shares from fund companies. However, the purchase and redemption must be exchanged for fund share (or a small amount of cash) for fund shares or replaced with a fund share to return combined securities (or a small amount of cash). Due to the simultaneous market transaction and purchase and redemption mechanism of secondary markets, investors can arbitrage transactions when there is a difference between the trading price between the ETF secondary market and the net value of the fund share. The existence of arbitrage mechanisms can prevent ETF from avoiding discounts of closed funds.
    The in actual operation, there are two ways to achieve arbitrage in ETF. When ETF premium trading, that is, the secondary market price is higher than its net worth transaction, the first -level market participants of ETF can be announced by the fund that the fund was announced on the day of the fund. A package of stocks constitute the same combination, purchase 50ETF in the first -level market, and then sell the corresponding share of the Shanghai Stock Exchange 50ETF on the exchange. In this way, if the transaction fee is not considered, the cost of investors' purchase of stocks in the stock market should equal the net value of the unit of ETF. Since ETFs in the secondary market are transactions, investors can obtain the difference.
    When ETF discount transactions, that is, when the secondary market price is lower than its net worth transaction, arbitrage traders can obtain arbitrage income through the opposite operation. That is, ETF's first -level market participants can buy 50ETFs in the secondary market. At the same time, the same number of ETFs in the first -level market (get a combination stock representing ETF), and sells redemption in the secondary market to sell redemption in the secondary market stock. If the transaction fee and liquidity cost are not considered, the value of investors selling shares redeemed in the secondary market should be equal to its net value of the fund. Because ETFs are discounted for transactions, arbitrage can make profits from it. How long does the ETF first and secondary market execute arbitrage processes take a long time? It usually depends on the level of traders traded in the market. For example, the efficiency of the software system of traders, this process will not exceed 1 minute.
    ETF's secondary market transaction is similar to stocks, and investors can buy and sell ETF shares through any securities company. The smallest unit of ETF secondary market transactions is first -hand (100 copies of one finger, about 100 yuan), low funding threshold, and small funds can participate. The secondary market transaction fee of the Shanghai Stock Exchange 50ETF is far lower than the purchase and redemption cost of the traditional index fund, and the cost of frequent buying and selling is low; the secondary market transaction is similar to the stock, and the price fluctuations are fluctuating during the transaction (unlike the traditional open index fund fund every day only every day A transaction price -a net value of fund share), which is convenient for investors to obtain benefits through band operations. In other words, the income of ETF stems from the fluctuation of the index, not necessarily a rising unilateral. However, unfortunately, to "T 0", the funds must be more than 1 million yuan, and small and medium investors have missed "T 0".

  3. When the market price of ETF is large and the net value of the fund share is large, investors can use the purchase and redemption mechanism for arbitrage transactions.
    For example, when the market price of ETF is higher than the net value of the fund share, the arbitrage operation method is: "Buy fund stock basket> purchase ETF fund share> sell fund share in the secondary market."
    Bitage income = (Fund secondary market price -fund share net value) × number of fund shares -buying stock baskets and selling fund share transactions.

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