Exchange traded fund (ETF) is a fund that trades on an exchange like a stock. It is traded in bundles basically because it becomes difficult to sell 10, 20 or 50 shares. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Large financial institutes are known as AP’s (Authorized Participants).They partner with an ETF provider and create an initial fund share which is then made available for investors. AP also helps in stabilizing the price. When demand increases, ETF price increases and thus the AP buy security to meet the demand and vice- versa. To know more, you can read the following article by Matthew Tucker  

https://www.blackrockblog.com/2016/01/27/etf-strategy-new-year/?cid=blog:stressed:matt