These answers seem good though contradictory. Perhaps I understand as well as I need to.
Is an ETF's share price driven by . . . ?
- Thread starter Steve Ladd
- Start date
It's like "the chicken or the egg". The chicken comes before the egg, because it lays one. At some point there must have been one chicken that is the last to come to this world not from an egg thus chickens becoming second to eggs, because they start being created from one. Meanwhile the egg as a means of reproduction comes before the chicken. I'm starting to express myself more and more like murray t turtle, but yes, ETFs are driven both by supply and demand and by arbitrages based on the NAV. The main point is that... some supply and demand comes from people that disregard the NAV changes, which are probably taken advantage of by HFT algorithms, not by traders with excel sheets
It's like "the chicken or the egg". The chicken comes before the egg, because it lays one. At some point there must have been one chicken that is the last to come to this world not from an egg thus chickens becoming second to eggs, because they start being created from one. Meanwhile the egg as a means of reproduction comes before the chicken...
The classic riddle which befuddles everyone. "Which came first, the chicken or the egg?"
The answer is the rooster.
Think about it.
Hahahahah, that's a nasty answer to the riddle.