Exchange-Traded Products as a Source of Network Risk

Hari P. Krishnan () and Ash Bennington ()
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Hari P. Krishnan: SCT Capital
Ash Bennington: Real Vision TV

Chapter Chapter 3 in Market Tremors, 2021, pp 61-81 from Springer

Abstract: Abstract This chapter forms the backbone of our case studies in Chapters 5 and 6 . Here, we will describe how exchange-traded fundsExchange-Traded Funds (ETFs) and notes are constructed. Significantly, dealerbroker/dealers rebalancing for these products can increase risk within the financial network. When an ETFExchange-Traded Funds (ETFs) or ETN stops functioning relative to the benchmark, dealersbroker/dealers in the product can turn into Dominant Agents, distorting the distribution of returns. We will also investigate levered products, showing that outcomes can be disappointing in choppy markets.

Date: 2021
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DOI: 10.1007/978-3-030-79253-4_3

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