XT ETF is essentially a fund. Although the XT ETF trading mechanism resembles spot trading, users purchasing ETF products on the XT platform doesn't involve direct digital currency transactions. Instead, users acquire shares of the corresponding ETF. Similarly, the price at which users buy and sell ETF products doesn't reflect the spot price of digital currency, but rather the net asset value of the respective ETF.
For instance, take XT ETF product BTC3L as an example. Imagine you purchase 300 BTC3L at the unit price of 1 USDT, which means you currently hold 300 USDT worth of BTC3L. In this case, the 300 USDT worth of BTC3L you currently hold does not represent the value of 300 USDT in BTC spot assets, rather, it represents shares of the BTC3L ETF product.Similarly, the 1 USDT isn't the actual BTC spot price, but rather the net asset value of the BTC3L ETF product.
Calculation of net worth
Net Asset Value (NAV) calculation The Net Asset Value (NAV) of a fund represents its actual worth, reflecting the fair value of the fund's assets per unit held by investors in the secondary market. It serves as the price for buying and selling ETFs.
For ETF varieties with different leverage ratios, the calculation method for XT ETF net asset value (NAV) is as follows:
- For 3x ETF varieties: Real-time NAV = NAV at the previous rebalancing point * [1 ± 3 *(Latest spot price of the underlying asset - Spot price of the underlying asset at the previous rebalancing point) / Spot price of the underlying asset at the previous rebalancing point * 100%].
- For 5x ETF varieties: Real-time NAV = NAV at the previous rebalancing point * [1 ± 5 * (Latest spot price of the underlying asset - Spot price of the underlying asset at the previous rebalancing point) / Spot price of the underlying asset at the previous rebalancing point * 100%].
Note: The NAV at the previous adjustment point refers to the position NAV after the previous rebalancing of the position.
Net Asset Value (NAV) Split and Merge:
For the purpose of reducing the entry threshold for users, increasing the sensitivity of ETF net asset value changes, and optimizing the trading experience, the platform will occasionally conduct split or merge operations on the net asset value. When a net asset value split is required, official notifications will be promptly sent to users. It's worth noting that net asset value splits and merges only affect the display of net asset value prices and ETF quantities, without impacting the total value of ETF assets held by users.
Suppose you purchased 100 shares of BTC3L at a net asset value (NAV) price of 1 USDT each. As the BTC price increases, the NAV rises to 10 USDT, this will lead to a total asset value of 1000 USDT for your BTC3L holdings (10 * 100 = 1000 USDT). Due to the high NAV, the platform performs a split on the BTC3L NAV, reducing it to 2 USDT and adjusting your BTC3L holdings to 500. Despite the decrease in NAV, the total asset value of your BTC3L holdings remains 1000 USDT (2 * 500 = 1000 USDT).
The specific rules for NAV splitting and merging of XT ETF are as follows:
When the NAV of certain ETFs falls below a certain threshold, the platform will merge these ETF products. This means that the NAV price will be multiplied by N before merging, and the corresponding ETF quantity held will become 1/N of the pre-merger quantity.
When the NAV of certain ETFs exceeds a certain threshold, the platform will conduct a split operation on these ETF products. This means that the NAV price will be reduced to 1/N of the pre-split value, and the corresponding quantity of ETFs held will increase to N times the pre-split quantity.
The exchange will promptly announce the NAV split and merge records, users can check them anytime on the split/merge page.
Note: Due to market fluctuations, there may be potential NAV premiums during certain periods. When placing an order, users should be mindful to avoid significant deviations from the NAV to prevent potential losses.