How are ETF prices determined?

An ETF's price is determined in the market like a stock: buyers and sellers set bids and offers, and trades happen where they meet.

At the same time, the ETF's holdings provide an anchor. If the ETF price drifts too far above or below the value of the underlying assets, large market participants can often arbitrage the gap through the creation/redemption mechanism.

For investors, the main practical factor is liquidity. In highly liquid ETFs, pricing tends to be tight and efficient. In less liquid ETFs, spreads can widen and premiums/discounts can become more noticeable, especially during market stress.