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Strategies & Market Trends : Underexposed Technical Analysis
AQN 5.875+0.4%Dec 5 9:30 AM EST
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To: Investor2 who wrote (415)8/11/2019 9:19:54 PM
From: Underexposed  Read Replies (1) of 914
 
Thanks for your response I2...

I believe that the price of the ETF is based solely on the bids and asks in the market.
I don't think so.... I think that this makes up a part of it but not the whole.

This section of that article makes sense sort of when you read it but I come away with a "what did this really say"

Trading tactics

When trading, you should try to avoid trading the ETF too close to the market open, before the underlying constituents have all opened. While it is intuitive to wait until the domestic underlying constituents are open before trading the ETFs, it is also valuable to wait until the correlated hedge of international ETFs start trading with full liquidity before trading those as well. This should explain why you see spreads in many names tighten a few minutes after the open. Also, as the trading day draws to a close, ETF liquidity providers have the risk that they will not get completely filled in a basket and would have to carry overnight positions that are not perfectly hedged. This is why spreads widen near the close. There is more risk to providing liquidity at that time.

from : A primer on ETF valuation

If this was a mutual fund then the value of each unit would be calculated at the end of each trading day from the components of the fund.

This sounds like the initial price for the day is something like a mutual fund and that is the starting point for the day.

That is my guess anyway {sigh}

UE
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