We have changed our privacy policy. In addition, we use cookies on our website for various purposes. By continuing on our website, you consent to our use of cookies. You can learn about our practices by reading our privacy policy.


Authorized Participant

  

Categories: Trading, Banking

If you’re an authorized participant, you’re a major player in the world of exchange traded funds (ETF). You are a liquidity master because you can create more ETFs, or reduce the number of ETFs on the market. Authorized participants would include huge banks and other similar large-scale financial institutions.

Related or Semi-related Video

Finance: What is a Liquid Market?18 Views

00:00

Finance allah shmoop What is liquid market Well it's one

00:07

that trades Ah lot High volume Lots of buyers Lots

00:11

of sellers Liquid lots of cash sloshing this way In

00:15

that way Go this way and that Did you ever

00:17

see a liquid market go this way and that That

00:20

little song Did you ever see a lassie Never mind

00:23

All right Weir Liquid markets Good Well because they implied

00:26

there's Lots of cash ready willing and able to be

00:29

put to work And that's usually a sign of a

00:31

healthy risk seeking active market versus risk averse one which

00:36

is you know hiding Ah liquid market means that investors

00:40

want to put their cash toe work that they have

00:43

actually saved cash along the way and or that they

00:46

have relatively easy access to credit And you can think

00:49

about it from the perspective of your kindly loving realtor

00:53

who wants a world where lots of people are buying

00:56

homes But in orderto have that happen you have to

00:58

have lots of people who are also selling homes at

01:01

the same time Otherwise prices just go higher and higher

01:04

with no supply to meet demand And at the end

01:06

of the day in real estate and it's in the

01:08

stock market while the most important thing yes that the

01:11

brokers get pays So that's a liquid market one that

01:15

trades a lot like it's Wet trading back and for

01:18

sloshing around not ice Where everything's you know all jammed 00:01:22.109 --> [endTime] up No needs heat or an animal or something

Up Next

Finance: What Are ETFs?
275 Views

What are ETFs? They are Exchange Traded Funds, and unlike index funds, they don't really change, or rebalance, based on the industries represented...

Finance: What is Closet Indexing?
0 Views

What is Closet Indexing? In the mutual fund arena, funds are usually active, meaning there is a highly paid fund manager calling the shots, or pass...

Find other enlightening terms in Shmoop Finance Genius Bar(f)