ETF Arbitrage

ETF Arbitrage

This video explains how arbitrageurs gain profits through mismatches between constituent share prices versus ETF prices and the problems with using ETFs to gain arbitrage profits.
Overview

The fact that you can create and redeem ETFs easily and at virtually no cost, means you can create ETF inventory very easily.

Arbitrageurs therefore will monitor the ETF price, and recalculate the real-time value of the constituent shares, and they will jump in whenever the prices deviate.

Key learning objectives:

  • Understand how arbitrageurs gain profits through mismatches between constituent share prices versus ETF prices

  • Understand the influence of arbitrageurs

  • Understand the problems with using ETFs to gain arbitrage profits

Join now to watch

This content is also available as part of a premium, accredited video course. Sign up for a 14-day trial to watch for free.

Summary
logo-animationlogo-animationlogo-animation
Expert
Gontran de Quillacq

Gontran de Quillacq

Gontran de Quillacq has 25 years of experience in derivatives trading, portfolio management, proprietary trading, structured products and investment research. He has worked with top-tier banks and hedge funds in both London and New York.

Related videos

What is an ETF?

What is an ETF?

Gontran de Quillacq07:14

Join now to watch

This content is also available as part of a premium, accredited video course. Sign up for a 14-day trial to watch for free.