3.5.1. ETN Pricing and Trading
ETNs trade on exchanges and their prices are determined by three factors: movement in the underlying index, investor demand for the ETN, and how many ETNs the issuing bank decides to issue or redeem.
Typically, the price of an ETN follows its closing indicative value. This value is based on the value of the benchmark index minus fees. Each ETN issuer has its own formula for calculating this value, and will publish the way it is calculated in its prospectus. The issuer publishes the closing indicative value at the end of each trading day. ETNs usually have intraday indicative values that are posted every 15 seconds throughout the day by the exchange where the ETN trades.
It is possible for an ETN to trade at either a discount or a premium to the closing indicative value. Issuers control this by either issuing new ETNs or redeeming outstanding notes in the following way. If an ETN is