finance Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fina ...

, an exchange for ETF (EFETF) transaction is one in which ETF units are exchanged for

futures contracts In finance, a futures contract (sometimes called a futures) is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The asset ...

which have the same underlying index; this is usually any of the broad based equity indices in North America, Europe, and Asia for which there is a liquid future available. Typical indices are S&P, FTSE,

DAX Dax or DAX may refer to: Business and organizations * DAX, stock market index of the top 40 German companies ** DAX 100, an expanded index of 100 stocks, superseded by the HDAX ** TecDAX, stock index of the top 30 German technology firms * Dax ...

CAC 40 The CAC 40 (french: CAC quarante ) (''Cotation Assistée en Continu'') is a benchmark French stock market index. The index represents a capitalization-weighted measure of the 40 most significant stocks among the 100 largest market caps on the E ...

. It is similar to an exchange for physical (EFP) in which the constituent basket of stocks is exchanged for a futures contract. Usually traded via a broker who will cross the futures on exchange, this is a way for ETF market makers to manage their inventories in ETF positions which they have hedged with futures

References

Futures markets Derivatives (finance) {{finance-stub