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ETF premium calculator

By Jude Wallis

An ETF premium is market price minus NAV, divided by NAV. A $50.30 price against $49.80 NAV is a $0.50 gap and a 1.004 percent premium. A negative result is a discount.

Premium or discount

1.004%

$0.50 above NAV.

Market price
$50.30
NAV
$49.80
Dollar gap
$0.50
$

Exchange price of one ETF share.

$

Comparable net asset value per share.

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The formula

premium percent=100P−NAVNAV\text{premium percent}=100\frac{P-\text{NAV}}{\text{NAV}}

PP is market price. Subtract NAV for the dollar gap, then divide by NAV and multiply by 100.

Price above NAV is a premium

$50.30 minus $49.80 is a $0.50 gap. Dividing by $49.80 gives a 1.004 percent ETF premium. How NAV works explains the benchmark.

Price below NAV is a discount

$49.30 minus $49.80 is negative $0.50. Relative to $49.80 NAV, that is a negative 1.004 percent premium, commonly stated as a 1.004 percent discount.

The denominator is NAV

Both cases scale the $0.50 gap by NAV, not market price. How ETFs work places this comparison inside the trading structure of an ETF.

Scope of the comparison

This is a point in time comparison between entered price and NAV. It does not project the next trade or NAV calculation. This is educational material, not financial advice.

Worked examples

\$0.50 premium to NAV

ETF price is $50.30 and NAV is $49.80. What are the dollar gap and premium percentage?

  1. Dollar gap is 50.30−49.80=0.5050.30-49.80=0.50, so $0.50.
  2. Premium is 100(0.50/49.80)=1.004100(0.50/49.80)=1.004 percent.

A $50.30 price against $49.80 NAV has a $0.50 gap and a 1.004 percent premium.

\$0.50 discount to NAV

ETF price is $49.30 and NAV is $49.80. What are the dollar gap and premium percentage?

  1. Dollar gap is 49.30−49.80=−0.5049.30-49.80=-0.50, or negative $0.50.
  2. Premium is 100(−0.50/49.80)=−1.004100(-0.50/49.80)=-1.004 percent, which is a 1.004 percent discount.

A $49.30 price against $49.80 NAV has a negative $0.50 gap and negative 1.004 percent premium.

Dividing by market price

The comparison is relative to NAV. Dividing the gap by market price changes the stated percentage.

Common questions

What does a negative premium mean?

It means market price is below NAV, which is called a discount.

Is the dollar gap enough?

The percent also shows the gap relative to the size of NAV.

Is this financial advice?

No. It is educational material for a price against NAV comparison.

Keep reading

This page is educational material, not financial advice. The figures come from the formula shown and assume the inputs you enter hold for the whole term. Your own rate, fees, taxes and timing will differ, so treat the output as arithmetic to check a decision against, not as a recommendation.