Traders Turning to ETFs Over Single Stocks

March 28, 2008 at 1:00 am by Tom Lydon

3129844648Exchange traded funds (ETFs) are great for the buy-and-hold kind of investor, but increasingly traders are turning to them to dodge the perils of single-stock trading.

There’s a downside, though: while ETFs can have a smoother price movement than a single stock, it also means that traders either have to take a bigger position or increase the duration of their trades to get those same results, says David Penn for Trading Markets.

One solution to the problem for traders is using leveraged ETFs. The same trading strategies apply, but because they maximize movement in the index, the potential for greater returns is more competitive with those of stock trades.

Subscribe

Enter your e-mail address below to sign up for our free e-mail newsletter, the Daily Market Update. We will never share your e-mail address with third parties.

Leave a Reply

    • Tom Lydon: Mark, You can go long or short on the euro with these funds: * Market Vectors Double Short Euro (DRR) *...
    • mark bade: how can one short the euro ie will drop as it relates to usd thanks
    • Tom Lydon: Hi Tom, Yes, you can still find an index to the categories on the right sidebar. An extended list of...
    • Tom Huff: Is there a link to compare with your website of past where you had an index on the right margin?
    • Angie Green: Thank u for the share!

Recent Podcast

Tom Lydon Talks ETFs on "Your Money with Chuck Jaffe"

 
 Tom Lydon on "Your Money with Chuck Jaffe" - July 30, 2008 [29:44m]: Play Now | Play in Popup | Download