etf premium is the situation where the price of an etf fund is higher than the net value of an etf fund on the market, on the contrary, when the price of an etf fund on the market is lower than the net value of an etf fund on the market, this will result in a discount rate of an etf fund. Investors can use etf fund 2 market in the middle of the premium arbitrage, or discount arbitrage. The above is the etf premium rate is the meaning of the relevant content.
The introduction of premium arbitrage and discount arbitrage
1, premium arbitrage: when the secondary market price is higher than the net value, the investor will buy a basket of stocks from the secondary market, and then in the primary market according to the net value of the change to the etf fund market share, and then in the secondary market will be the etf high price to sell, to carry out the arbitrage;
2, discount arbitrage: when the price of the secondary market is less than the net value, the investor in the secondary market price is lower than the net value, the investor in the secondary market price is lower than the net value, the investor in the secondary market price is lower than the net value of the etf fund. When the secondary market price is less than the net value, the investor in the secondary market to buy the etf fund market share at a low price, and then in the primary market according to the net value of the market share redemption, and then in the secondary market will be sold shares, arbitrage.
It is important to note that the stockholders use the difference between the on-market price of the etf fund and the net value of the off-market for arbitrage, and the profit obtained must be more than the cost of trading fees, or else it will not be able to make a profit. This article is mainly written etf premium rate is the meaning of the relevant knowledge points, the content is only for reference.