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...]