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Can you expand on this? From my understanding ETF's re-balance quite slowly, once every few months, how does HFT even help, much less make ETF's possible?
by ric2b 6y ago
Can you expand on this? From my understanding ETF's re-balance quite slowly, once every few months, how does HFT even help, much less make ETF's possible?
- smabie 6y agoETF shares are created and destroyed all the, bringing their value inline with the underlying. So for a S&P 500 ETF, HFT firms are creating shares when the price of the ETF is too low and destroying them when they are too high. It doesn't have to do with how ETFs rebalance, rather how shares are created and destroyed.