Dear T212 Traders,
Tihomir and I recently joined GraniteShares. Our role on the forum will be to answer all your questions and to make sure that you understand correctly how GraniteShares’ ETPs work.
We create this topic to centralize all questions about GraniteShares ETPs in order to help you better understand the mechanics around our investment products.
Unlike others investment products, the pricing and execution of orders are not in the same hands. For an ETP, multiple player (the exchange, the issuer, the market maker, the index provider, brokers and investors) have different roles. This allows more transparency at the end.
The role of GraniteShares is defined in the legal documentation, accessible by all investors, and can be found on our website on each product page: www.graniteshares.com
Please find below a few useful topics in order to enhance your understanding about GraniteShares’ ETP:
1- Value per ETP vs. Price per ETP
The price you trade ETPs and the value per ETPs are two different things. The Price per ETP is the level at which each market participant agrees to buy and sell the ETP. The Value per ETP, which is calculated once a day by GraniteShares, is used for the creation and redemption of ETPs with the Authorised Participant.
More information can be found here: Value vs Price
2- Time difference (Europe and US)
You may notice price difference with the US Leverage and Short ETPs that are listed in Europe, this is due to the time difference. The time difference implies a difference in the daily performance. A European Exchange, such as the London Stock Exchange, publishes the closing price per ETPs around 16:30 GMT. At that time the Index Closing Level used to determine the Value per ETPs will be calculated later on (assets trading in U.S. for instance).
More information can be found here: Measuring Performance
3- Early Redemption
In some cases described in the legal documentation, an ETP may be subject to Early Redemption. This may happen if the Value per ETP is less than 200% of the Minimum Redemption Amount on two consecutive days…
Please refer to the Final Terms (p. 6), in order to check all scenarios that may initiate an Early Redemption. The Final Terms are available for each ETP on the relevant product page: GraniteShares ETPS
4- Stop Loss Mechanism
In order to avoid an ETP reach a value of zero during a volatile trading day, there is a Stop Loss Mechanism on each of GraniteShares ETPs.
More information can be found here: Stop Loss Mechanism
5- ETP Performance
Leveraged ETP Securities are designed to deliver a daily percentage return, which means that the leverage factor is constant over time and also means that returns for holding periods longer than a day are subject to compounding. The impact of compounding results in the ETP performance deviating from the leverage factor.
More information can be found here: Compounding Impact
Please, feel free to add your questions following this message and we will make sure to answer those promptly.
To make it easier for you, we created an “education section” on our website where you can find all information and videos you need to know before starting to trade on GraniteShares Leveraged ETP Securities.
Here: Education GraniteShares
You can find also answers for the most common questions on our FAQ: Faqs
Another useful article that you can read to understand everything you need to know about ETPs: Everything You Need to Know About ETPs
Keep in mind that GraniteShares offer 3x Long and -3x Short products… So in any case, there will be some investors who will make gains and others who will make losses.
Tihomir and Marc from GraniteShares
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