Token trading has several benefits including reduced costs between token exchange,
the creation of arbitrage opportunities, staying anonymous while trading and promoting the exchange and circulation of tokens.
These factors combined lead to the constant
creation of arbitrage opportunities.
Not exact matches
When the price
of the ETF deviates from the underlying asset value, institutions utilize the
arbitrage mechanism afforded by
creation units to bring the ETF price back into line with the underlying asset value.
The ability to purchase and redeem
creation units gives ETFs an
arbitrage mechanism intended to minimize the potential deviation between the market price and the net asset value
of ETF shares.