With an ETF is the stock price affected by not only NAV but the bid/ask as well?

Question

With an ETF is the stock price affected by not only NAV but the bid/ask as well?

Answer 1

There is some relation to the nav, but the relation is very tenuous.  The bid/ask is by far the driving factor in determining the price of the ETF.  Here are just a few examples to illustrate the point.

MXF currently is selling at about a 15% discount to nav. (Mexico Fund)

CHN currently is selling at about a 13.5% discount to nav. (China Fund)

CLM currently is selling at about a 64% premium to nav (Cornerstone Strategic Value).

Answer 2

Yes.

Although it is nothing like the bid/ask pressure on closed end funds.

Answer 3

The bid/ask is the stock price. The stock price is "adjusted" by the market makers. Say it is a FTSE100 ETF. They will buy the constituent stocks when they think it is right then swap them for ETF's possibly at a higher price. They can then offer the ETF at a keen price, having made a profit already (arbitrage)