The Pricing Mechanism and Rates of ETF Product

Pricing mechanism

ETF Products are essential to ensure that ETF holders enjoy a fixed target multiple of the daily return on the underlying asset by fixing the returns of the leveraged fund. Therefore, the value of the ETF product is the net value of its fund, which tracks the position of a basket of futures of the corresponding crypto.

The platform will announce the net value of the fund in time to maintain a high degree of transparency.

Theoretically, the net value of a fund is the fair-trading price of ETF products in the secondary market. However, due to fluctuations in the market, there may be a situation where the secondary market trading price deviates from the net value of the ETF in a certain period of time, resulting in a certain premium.

When the premium exists, arbitrage opportunities will arise, and arbitrageurs in the secondary market can gradually eliminate the premium through arbitrage operations, ensuring that the product trading price closely follows the fair price. Users should pay attention to their order price not deviate too much from the net value to avoid losses

At the same time, when the net value price is lower than 0.1 USDT, there will be a merger mechanism to change the net value price 10 times before the merger, but the corresponding amount will also become 1/10 before the merger, and the user’s total assets will not be affected in any way to improve the sensitivity of price changes and optimize the trading experience.

Calculation of the net value of the fund

ETF fee rates

Unlike other derivative products, margin and futures, ETF products generally charge a fund management fee of 0.001% per day, and in the case of holding equivalent products, ETF holdings cost less than futures and margin trading.

In addition, the same as spot trading, you pay a 0.2% transaction fee when trading ETF products, and you can also use MX Token to enjoy a 20% discount on the fee.

Disclaimer: Trading crypto involves significant risk and can result in the loss of your invested capital. The materials are not related to the provision of advice regarding investment, tax, legal, financial, accounting, consulting, or any other related services and are not recommendations to buy, sell, or hold any asset. MEXC Learn solely provides information, but not financial advice. You should ensure that you fully understand the risk involved before investing.

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