On-site premium means that the fund price is higher than the net value of the fund, and the fund price is seriously out of its own value. Funds with this situation have a high bubble and are more likely to fall in the middle and late stages. Simply put, the fund premium means that when the fund is issued, the issue price of the fund is greater than the value of the fund itself because the demand is greater than the supply.

Extended data:

On the floor is the stock market, also known as the secondary market. Off-exchange market is understood as the stock exchange market, that is, the agency sales of banks and securities companies, and the direct sales of fund companies, that is, the familiar open-end fund sales channels.

The floor trading price is real-time, that is, the price you bought at that time is the same as the price of stock trading.

Because there are trading, subscription and redemption mechanisms in the secondary market at the same time, holding these two types of funds can not only wait for the net value to rise to realize income, but also carry out arbitrage trading when there is a difference between the transaction price in the secondary market and the net value of fund shares. This also makes the price of such funds traded in the secondary market will not be discounted like closed-end funds.

However, if investors want to sell the purchased fund shares at the designated outlets of the exchange, they must go through certain transfer custody procedures; Or conversely, the general arbitrage mode from Dallas to the audience is that when the net value of the fund is higher than the transaction price in the secondary market, it is bought in the secondary market and redeemed in the primary market, thus making a profit; When the net value is lower than the transaction price in the secondary market, you can buy in the primary market and sell in the secondary market.

However, these two arbitrage mechanisms are still different. According to article 14 of LOF Rules published by Shenzhen Stock Exchange, LOF must be transferred to custody in order to switch between two different markets. This process takes 2 days.

In other words, LOF arbitrage takes at least 3 days, and it is very risky to judge the price or net value after 3 days. Individual investors rarely use LOF arbitrage. The time of ETF arbitrage does not exist this problem. When there is a big deviation between the price and the net value, arbitrage can be started immediately, but the subscription and redemption of ETF are realized through a package of shares. In the case of the same deviation between price and net value, the fewer the number of shares in the underlying index of ETF, the greater the chance of successful arbitrage. Many individual investors try ETF arbitrage.