Paper trading (sometimes also called "virtual stock trading") is a simulated trading process in which would-be investors can 'practice' investing without committing real money. This is done by the manipulation of imaginary money and investment positions that behave in a manner similar to the real markets. Before the widespread use of online trading for the general public, … [Read more...]
Archives for 12/11/2009
S&P( Standard & Poor’s) 500
The S&P 500 is a market free float-weighted index of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the S&P 500 are those of large publicly held companies that trade on either of the two largest American stock market companies; the NYSE Euronext and the NASDAQ OMX. After the Dow Jones Industrial Average, the … [Read more...]
ETFs vs. Individual Stocks
It i s important fora investor to understand the differences between individual stocks and exchange-traded funds (ETFs). Each one of it has its own advantages and disadvantages. Diversification Diversification is an attractive feature of ETFs. Instead of taking concentrated risks by purchasing individual stocks, investors can own an index of stocks with ETFs. Owning … [Read more...]
Benefits of an Exchange Traded Fund (ETF)
1. ETF's are traded throughout the day just like regular stock. 2. NAV or Net Asset Value is known. The value of an ETF can be calculated throughout the day because the underlying index doesn't change. 3. Arbitrage. ETF's are not traded at systematic premiums or discounts since financial institutions can exchange ETF's for the underlying assets. 4. Tax Advantages. Very few … [Read more...]
Trading ETFs: Basic Order Types
Meaning : An exchange-traded fund (or ETF) is an investment vehicle traded on stock exchanges, much like stocks. An ETF holds assets such as stocks or bonds and trades at approximately the same price as the net asset value of its underlying assets over the course of the trading day. Since exchange-traded funds (ETFs) are bought and sold just like stocks it's important to be … [Read more...]