Why Arbitrage is Essential For Exchange Traded Products

Arbitrage processes associated with Exchange Traded Products are normally invisible to investors but are essential for ETPs to trade as they are intended.  This post describes these arbitrage processes in detail and explains how they can (and have) gone wrong.  Exchange Traded Products (ETPs) enable stock-like trading of collections of securities that would be more difficult, or impossible to trade directly.  For example, it’s not …

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