MDA - Market Direction Analysis

[hk2]

To create QQQ shares, The MM (or other large investor) has to buy NDX shares, deposit them with the trust, and the trust will issue QQQ in return (valued at approx. 1/40 value of NDX shares deposited.)


To redeem, the process is reversed; Return QQQ to trust, receive NDX shares valued approx 40x value of QQQ.

You can't dilute the value of QQQ by issuing more shares, because new shares will only be issued when the proper amount of NDX shares are deposited. And the shares are always created and redeemed at the same 40:1 ratio.

All this happens in the "primary" market. You & I and the folks mentioned in the original conspiracy {g} post, trade in the secondary market. The inherant value is still 40:1.

I just can't see how the traders in the secondary market can affect the value of the NDX stocks within the trust just by buying/selling shares of QQQ.