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ETN Liquidity:

ETNs are open-ended securities and therefore are not limited to on-exchange volumes.

ETN early redemption "liquidity":

ETNs are structured to allow dealers to redeem existing units at their current intrinsic value directly with the issuing entity on any given date. Unfortunately, that doesn't mean an early redemption order is executed immediately. Rather, the redemption process requires early notification to the issuing entity and the redemption value is determined on that date. Several business days later, typically five, investors receive payment. During this period, the holder of the ETN is exposed to default risk. While the redemption option essentially converts ETNs into very short-term debt securities, that doesn't imply that the credit risk is a negligible, or even theoretical, issue.

If you hypothetically carried enough ETN shares to use the early redemption mechanism and the maturity date of the ETN was "a ways away", why would you use the early redemption mechanism over selling on an exchange?

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ETN and ETF shares that trade on the stock market are closed-end as trades that don't change the number of shares.

ETN and ETF shares that trade directly with the sponsor, under certain conditions of large orders, are open-end as trades that do change the number of shares overall. So trading directly with the sponsor is very close to trading a large block of shares at a fixed price.

And yeah, a market-maker could balance their stock-exchange position by trading with the sponsor. But anyone with a large position can do the same thing.

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