They would thus set stock prices right again -- and, through arbitrage techniques, they would take little risk in doing so.
Some, including Och-Ziff Capital MaNew York of New York, profit through arbitrage, which exploits price differences of similar securities, like a stock and its options.
But investors could protect themselves through arbitrage, which is a process of buying and selling stocks and bonds to alter their mix of debt and equity.
He set up his firm in 1994, and has long been respected on Wall Street as an "event-driven" investor making money through arbitrage on mergers and acquisitions.
The opportunities for fraud at such a bank are obvious, he noted: "If I can slow down the movement of money by one single second, I can make millions through arbitrage".
If the ETF is shrinking (more people want to sell than to buy), then the AP sells creation units to the fund manager and receives in return a bundle of securities known as the "redemption basket".The AP can also keep the price of the fund in line with its assets through arbitrage.
