Why More and More Traders to ETF’s as a Preferred Trading Method
ETF’s = Exchange Traded Funds. ETF’s are a prominent and effective way to trade different indexes and sectors in the Stock Market. They trade exactly like stocks, but just offer more diversity and cushion as apposed to an individual stock.
For example, Gold and Silver have been very hot commodities in the last few years. So, let us say that instead of trading an individual gold mining company like Goldcorp (GG) you can buy the Gold Shares ETF (Ticker: GLD). The same goes for Silver: instead of buying the Silver Futures, (/SI) you could buy the iShares Silver ETF ,or even the more leveraged ProShares Ultra Silver ETF (AGQ)- if you seek a higher risk-reward.
Below is a list of some of the top ETF’s that I actively trade:
All of these products are highly liquid for trading options and offer excellent diversification and the capability to invest in any industry in the world. The 3x funds are leveraged by 300% to offer higher exposure in a certain market or directional bias.
Although all the above listed financial products are “option-able” securities you can still buy these funds just like you would purchase stock in a company. However considering the listed options on these ETF’s are so heavily traded and have such tight bid/ask spreads that it makes it very attractive and favorable to trade the options.
An example of a recent trade I made in 2012 on an ETF is in the silver market on SLV. I was bullish on the SLV around the start of the year and decided to buy long-term vertical call spreads. The trade scope was as follows:
If this type of trading makes sense to you fill out the form below to learn how you can build sustainable long-term wealth and produce consistent monthly income in the Stock Market with Exchange Traded Funds.