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5:00Inside an ETF: Creation & Redemption
Nobody at the ETF ever buys your shares. A hidden arbitrage machine keeps the price honest, here's the loop.
When you buy an ETF on the exchange, the fund itself sells you nothing. You buy from another investor or a market maker in the *secondary market*, the same way you'd trade a stock. The fund's share count only changes in the *primary market*, and only a handful of licensed firms can touch it.
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