ETF Trading

Ahmad A Hassam asked:

ETF trading is?highly popular now! ETFs were introduced some three decades back. Now you can trade ETFs on different market sectors as well as on commodities, currencies and international stocks and much more. So what are ETFs? ETFs stand for the Exchange Traded Funds.

ETFs represent an ownership stake in a basket of stocks or other underlying assets?like bonds, gold, commodities, currencies etc that might represent a stock index, a market sector like energy, oil, technology, semiconductors, travel, education, commodities, currencies?and so on. ETFs have the advantages of both the stocks as well as mutual funds.

You can trade ETFs as stocks. The price of an ETF share keeps on changing in accordance with the price change of the underlying stocks or assets.?However, ?ETFs give your diversification?just like mutual funds.?Instead of owning one stock or one asset, you now own a basket of stocks or assets in the shape of an ETF. But unlike mutual funds whose net asset value is only calculated at the end of the day and you cannot buy or sell a mutual fund share during the day, an ETF share can be sold anytime just like a stock.

The other main advantage that ETFs have over mutual funds is that they have very low fees something like 0.7% of the investment as compared to 2-4% of the usual fees that you have to pay when buying mutual fund shares. This makes ETFs highly superior to mutual funds as well as stocks. So here you have an asset that trades like a stock but has the diversification benefits of a mutual fund and very low cost as compared the mutual funds.

There are now thousands of ETFs in the market. In the past if you wanted to take advantage of oil price increase, you had to do a lot of reseach and look for a strong?oil?company stock. But now you can buy an ETF that might represent an oil index. Since you are bullish on oil prices, this ETF is your best investment on oil prices. It represents a diversified portfolio of oil stocks that would mimic some oil sector index.

You can even have leveraged ETFs. This means that if the index moves up by 1%, the ETF will move by let’s say 5%. There are currency ETFs as well that represent some basket of currencies that you might have a bullish opinion. You can also trade short ETFs also known as Inverse ETFs. If the index moves up by 1%, short ETF or the inverse ETF will move down by 1% and vice versa.

But just like any other investment or trading, first educate yourself thoroughly about ETF Trading before you delve into this great investment opportunity.


ETF Trend Trading and Facts to Be Aware Off

Damon Jegede asked:

The common man relates the term ETF Trend Trading as an investment. As we invest our money and trade in shares, bonds and debentures through stock exchanges. Similarly ETF or Exchange traded funds comprises assets and securities and are being traded roughly at the same price as the NAV of a security is traded on a specific day. It is very much like mutual fund and a close end fund.

In the recent times the ETF trend trading made a good growth and rose up a lot. The market of ETF trading has risen about 26 times since 1996 and presently the market trades near about 800 million dollars every day. The institutional traders realized ETF trend-trading to be a modern potential market like the mutual funds and made this a success story.

The ETF also behaves in the same manner as we purchase or sell mutual funds for its NAV price at the end of each the trading day. Also as close end funds are traded more or less than the NAV price on a specific trading day an ETF trend trading is traded similarly. The price of the trend trading whether it will increase or decrease is tracked through an index like Dow Jones, S&P 500 and Sensex.

One should be aware of certain significant data before getting into ETF trend-trading. Before one starts he should know the basics of ETF trend trading, how to create an ETF portfolio and keep a track of it and how to minimize the losses and book profits out of it. The volatility of ETF is much less compared to the individual stocks and is confined within a range which makes their standard deviation lower than as equated to stocks.

Considering the factors such as low costs, less risky, presence of highly qualified and experienced professionals, more diversified than stocks all these have made ETF-trend trading a better and attractive investment option.


The Benefits Of Exchange Traded Funds (ETFs)

The Benefits Of Exchange Traded Funds (ETFs)

The Benefits Of Exchange Traded Funds (ETFs)

Author: Ted Brumby

Exchange Traded Funds are designed to hold assets such as stocks or bonds, and generally trade at the net asset value of their underlying assets. Like index tracking pooled funds, Exchange Traded Funds are designed to track a chosen market index. However, ETFs tend to have a lower expense ratio than index funds. The easiest way to think of ETFs is that they are akin to mutual funds that trade like stocks.

There are a number of benefits to investing in Exchange Traded Funds. ETFs are liquid, meaning that their market price is unlikely to be affected by high or low demand. In fact, market processes insure that the fund value and price of ETFs represent only the prices of the shares it holds. If the demand for a particular ETF should rise, the United States creates new baskets of securities in response. If the demand should fall, the reverse occurs.

Because Exchange Traded Funds reflect index performance, investors know what they are investing in. Quality ETF sharing institutions regularly disclose their holdings, so investors are able to clearly evaluate their investment portfolios and plan for the future.

Exchange Traded Funds provide diversification with less risk by allowing investors to make targeted investments in chosen areas. This less risky diversification is possible because ETFs provide broader exposure to entire markets, rather than concentrating investments in a small number of individual companies.

Exchange Traded Funds are useful in speculative trading strategies, such as trading on margin or short selling. Like traditional stocks and bonds that can be traded intra-day, ETFs allow investors to speculate on the direction of short-term market movements. If investors notice a rise in the price of an index, they can purchase ETFs that mirror the index, hold the funds while prices continue to climb, then sell them for a profit before the end of the trading day. Exchange Traded Funds allow investors to take advantage of the daily fluctuations of its basket of securities, trading the entire stock market as though it were a single stock.

As previously mentioned, Exchange Traded Funds generally have a lower expense ratio than most actively managed equity funds and even some equity index funds. ETFs are more cost-effective, both when making an initial investment, and because they provide diversification comparable to the exposure gained by investing in individual shares. However, investing in Exchange Traded Funds allows the consumer to avoid the trading costs involved in the numerous transactions of buying a large number of individual shares.

Article Source:

About the Author:

Exchange Traded Funds are flexible, allowing individual investors, as well as institutions, to utilize them in a broad range of investment strategies. Investors buy and sell ETFs like shares, and trade them through investment advisors, internet trading accounts, and brokerages.

ETF Trend Trading System Storm Alert!

Brette Robbie R Lambert asked:

Without question no subject in the market today that is getting more investors excited or has a greater larger potential for investors than ETF Trend Trading. ETF benefits are multiple especially for passive traders. They offer: Low costs, broad diversification, the ability to buy and sell on an intraday basis, the increasing number of highly specialized ETF offerings, the ability to profit from a unique trending market sector…just to name a few.

For example should you decide to quickly get a piece of the fortunes of regional banks or pharmaceutical companies, there’s an ETF for you. If you want to get in on the real estate market..BAM! you again have numerous ETFs available too. What if you only want to invest in the top performing retail companies within the U.S. but not internationally. You’ll easily find ETFs here as well.

Of course you may see an emerging, reversing trend in a specific sector. Trading long or short is possible with ETFs! You can profit regardless of which direction the underlying stock moves.

Unlike Mutual Funds, ETFs offer the flexibility and can be bought or sold all day long (not that you want to do that of course).

Investors are abandoning the age old fundamental approach for real time technical analysis. Traders are embracing this financial vehicle so quickly that the traditional mutual fund managers are wising up.

The current number of available exchange-traded funds or ETFs and the quantity of assets supporting those ETF’s will only continue to grow in number. Consequently, an important consideration for the future growth of the industry is the corresponding need for traders of these products to really understand how to execute trades within such a broad range.

What’s needed is a clear logical and simple system that confidently tells you:

1. Exactly which market is trending down, up,or sideways, and…
2. Which indexes are obviously participating the most aggressively within that market trend (if any).

Becoming an informed investor means that you understand what makes each ETF unique, how they work, and which basket of funds are on target to help you attain your financial goals.

Starting Out With ETF Trading:

I hate to make a blatant pitch here but I will say that regardless of whether you’re just starting out or a seasoned professional trader, ETF Trend Trading (link below) will offer you all the tools and tutoring you need to understand this dynamic field by:

1. Giving you a foundational approach to understanding which types of ETFs and how many too look at.
2. Exploring the most up to date ETF trading strategies that work today.

ETF Trend Trading focuses it’s strategy on executing trades on the most trending ETFs. More importantly adhering to a simple trading system that emphatically emphasizes trading what you see, not what you think or feel. is how the pros see consistent returns.

The ETF mentorship program run by former financial adviser referred to as “Big A”. He and his team offer a logical, step-by-step process that shows even the most novice investors a systematic way to quickly but safely master ETFs.