> how do you crash an ETF? I'm talking about broad index funds. Not stuff like ARKK
Any ETF's share value can "crash" if there are not enough buyers to purchase shares when they are trading below NAV (net asset value). It's worth a quick google to see what "market makers" or "authorized participants" do, but the thing to keep in mind is: if the market is kind of exploding in some major ways (think 2008) an ETF might not have a lot of buyers, even if its market price is well below its net asset value.
But why would that happen? Let's say an ETF normally trades at 99% of it's NAV. Suddenly it "crashes" and only trades at 97.2% after some bad news. Bob in accounting embezzled millions. It's gone, Bob spent it all at the strip club. Wouldn't some investor decide to just net the approximately ~1.8% by increasing demand and buying it up? After all, Bob embezzled millions. Not the billions that larger ETFs control.
Unless you're proposing some weird industry wide boycott of Vanguard or something. In that case the only thing stock traders are going to accomplish is destruction of every publicly traded asset they hold as market confidence in retail traders slowly slips downwards.
> Wouldn't some investor decide to just net the approximately ~1.8% by increasing demand and buying it up?
When it comes to individual investors, sure, in a situation where everything is going crazy in the markets some will buy and some will be happy to sell, provided the exchange doesn't halt trading temporarily in response to an extreme drop in share prices. The problem comes when the large market makers who are meant to really be on the ball and buy large blocks of shares quickly are suddenly worried about their own survival, or at least that's the way I remember a few of the chaotic days of 2008.
I knew a few people who made money buying bond ETFs at a discount to NAV.
Any ETF's share value can "crash" if there are not enough buyers to purchase shares when they are trading below NAV (net asset value). It's worth a quick google to see what "market makers" or "authorized participants" do, but the thing to keep in mind is: if the market is kind of exploding in some major ways (think 2008) an ETF might not have a lot of buyers, even if its market price is well below its net asset value.