News for hackers. Stuff that matters.

A comment on Ask HN: Passive income ideas for solo developers?. Parent comment

Re:Ask HN: Passive income ideas for solo developers? by bobbington on Sunday June 18, 2017 @09:42PM (#14584091)
Not really the ETFs are generally backed by the actual securities they represent. They may deviate from market value a bit intraday, but those deviations are picked up by special arbitrageurs and quickly eliminated.

http://www.understandetfs.org/creation_redemption.html

[ Parent | on HN ]
Re:Ask HN: Passive income ideas for solo developers? by StavrosK on Sunday June 18, 2017 @10:33PM (#14584255)
Ah I see, thanks, I wasn't aware of that mechanism. So you can basically exchange the ETF for the actual held securities at any point, which keeps the price near that of the securities, pretty clever.
[ Parent | on HN ]