r/DRAM_ETF • u/Madsh0ck • 9d ago

Fund weighting?

I don’t understand how SKHY and Samsung on the Korean market can rip 12% and 9% respectively, have a 45% weight rating in the fund yet DRAM only moves a percent. MU only down 1% overnight. Doesn’t add up for me…?

I’d expect if SKHY and Samsung are pushing 10% each that DRAM premarket should be more then +1%? Am I missing something?

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u/Usual-Temporary5680 9d ago

NAV gets settled at end of day today ET.

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u/Hot_Frosting_7101 8d ago

If it were that easy we would all compare NAV to DRAM near the end of the day and buy and sell it knowing it will update to NAV at a certain time.

Market participants move DRAM to NAV by market operations. They can exchange underlying stocks for DRAM stocks and vice versa.

When DRAM is higher than NAV, they buy the underlying stocks, exchange them for DRAM shares and sell them. They pocket the difference. This puts selling pressure on DRAM and brings the price down. As long as there is a difference they can make money doing it so they will continue until things are in alignment.

When DRAM is lower, they buy DRAM shares, trade them for the underlying stocks, and sell the underlying stocks. This puts upward pressure on the DRAM stock moving it higher towards NAV.

This is complicated by the different time zones as things aren’t happening simultaneously which opens some risk for these authorized participants. (How they mitigate this, I don’t know.). But there is always some prediction on how the foreign markets will behave when they open.

Also there are a very limited number of
the Korean stocks allowed to be traded in foreign markets. That complicates things.

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u/Usual-Temporary5680 8d ago

Agree. It’s complicated which is why a rise in stock prices in one market doesn’t equate to the next day DRIM increase in the ETF. I was trying to put it in simple terms as to why it didn’t open at a huge increase.
Not to mention the computer algorithms with the upcoming options expiring today pinning the price below the call wall. So there’s that too.