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The Story of ETF Creation and Redemption

Posted By Barry Ritholtz On November 8, 2011 @ 10:32 am In ETFs,Video | Comments Disabled

Ever wonder what allows ETFs to be liquid? The answer is “creation and redemption,” the process that lets ETFs trade even when volume is low. Using simple illustrations and a metaphor about flowers, this seven-minute animation will change the way you look at ETFs.

Hat tip Themis Trading [1]


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2011/11/the-story-of-etf-creation-and-redemption/

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[1] Themis Trading: http://blog.themistrading.com/

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