I want to ask if the traded volume of Nifty bees really matters. Since it is an open ended fund, shouldn’t it be liquid irrespective of the traded volumes. So, if you are trading nifty bees intraday, should the order be executed immediately irrespective of order size and volume at that time? Does this also mean that there is no bid-ask spread?
Being an ETF NiftyBEES behaves very much like a stock. The AMC issuing the ETF does not use the exchange as a transacting window rather it's the ETF holders who quote the "ask" price while buyers of the ETF quote the "bid". So clearly there is a bid-ask spread and a trade occurs when either a bid or ask it hit. Orders will be executed if there is enough liquidity which for most retail orders is available. For some ETFs like the LiquidBEES, the AMC allows direct purchase for large orders (above Rs. 15 Lac) at a fixed NAV of Rs. 1000 [Note: LiquidBEES' NAV is set to Rs. 1000 every day by paying a daily dividend)
Unlike non ETF mutual funds that calculate NAV every end-of-day and allow transactions based on that value, the ETFs price being tied to the underlying asset (in this case NIFTY) moves pretty much in tandem with the underlying asset's price.