The redemption application provided the reference net value of SSE 50ETF fund in a short time, and also reflected the average market price level of a basket of stocks at that time. Large investors can carry out short-term arbitrage trading according to the market difference between 50 redemption and 50ETF, and the difference is expressed by discount/premium rate:

Discount/premium rate =(50ETF secondary market price P- subscription and redemption reference net value IOPV)/ subscription and redemption reference net value IOPV× 100%.

Discount arbitrage: when the transaction price of ETF in the secondary market is lower than its net share value, that is, when a discount transaction occurs, a large number of capital investors can buy ETF at a low price in the secondary market, and then redeem (sell at a high price) their shares in the primary market (that is, fund companies) in exchange for a basket of stocks, and then sell them in the secondary market to realize arbitrage trading.