Cryptocurrency Q&A
Why would an ETF trade at a discount?
Why would an ETF trade at a discount?
Daniele
Wed Jan 01 2025
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6
answers
1238
I'm trying to understand why an Exchange Traded Fund (ETF) would trade at a discount. I'm curious about the factors that might cause this phenomenon and its implications for investors.
6 answers
Eleonora
Fri Jan 03 2025
This situation is referred to as a premium, where the market price is higher than the underlying value.
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SsamziegangSerenadeMelodyHarmonySoul
Fri Jan 03 2025
Market prices are influenced by the forces of supply and demand.
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isabella_taylor_activist
Fri Jan 03 2025
On the other hand, if sellers exert heavy pressure on the market, the ETF's price can fall below its NAV.
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QuasarPulse
Fri Jan 03 2025
This occurrence is known as a discount, indicating the market price is lower than the intrinsic value.
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SakuraFestival
Fri Jan 03 2025
As a result, an ETF's market price may not always align with its NAV.
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