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ETFs - American Exchange Traded Funds

RichKid

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ETF's can be attractive to those looking for low cost, liquid exposure to various markets that might otherwise be out of reach. Unlike in Australia, the ETF market in North America is highly developed.

Some good links for those looking to trade or prepare to trade US listed ETF's below:

AMEX listed ETF's
http://www.amex.com/etf/EtMain.jsp
Eg Real Estate: URE (long), SRS (leveraged short).

Nasdaq listed ETF's
http://www.nasdaq.com/structuredeq/nasdaq_etf_family.stm

NYSE listed ETF's
http://www.nyse.com/about/listed/funds.html

Canadian (TSX) listed ETF's
http://www.tsx.com/en/listings/sector_profiles/exchange_traded_funds/index.html

I hope this saves you some trouble when it comes to learning about and trading these funds. There's a lot of risk involved if you don't know what you're doing, hence my research into these products.

If we're lucky, some of the old hands or lurkers on ASF may give us some inside tips on trading ETF's.
 

RichKid

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Re: ETF's- American Exchange Traded Funds

Wayne mentioned the following in another thread:

wayneL
Re: S&P 500
Just on index ETF's, here are some others for anyone that is interested.

Dow => DIA
Nasdaq => QQQQ
Russell 2000 => IWM

Also very liquid options in the above.
__________________
 

wayneL

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Re: ETF's - American Exchange Traded Funds

ETF's can be attractive to those looking for low cost, liquid exposure to various markets that might otherwise be out of reach. Unlike in Australia, the ETF market in North America is highly developed.

Some good links for those looking to trade or prepare to trade US listed ETF's below:

AMEX listed ETF's
http://www.amex.com/etf/EtMain.jsp
Eg Real Estate: URE (long), SRS (leveraged short).

Nasdaq listed ETF's
http://www.nasdaq.com/structuredeq/nasdaq_etf_family.stm

NYSE listed ETF's
http://www.nyse.com/about/listed/funds.html

Canadian (TSX) listed ETF's
http://www.tsx.com/en/listings/sector_profiles/exchange_traded_funds/index.html

I hope this saves you some trouble when it comes to learning about and trading these funds. There's a lot of risk involved if you don't know what you're doing, hence my research into these products.

If we're lucky, some of the old hands or lurkers on ASF may give us some inside tips on trading ETF's.
Thanks for those Rich, I was using Yahoo to sort through ETFs which was quite befuddling, that will make it much easier.

I've been using USO (crude oil ETF) for trading options on oil rather than the futures options because of a more transparent market.

But I've been passively looking into these for a while too as bottom drawer stuff. Hope there is enough interest here for a discussion to get going.
 
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Re: ETF's - American Exchange Traded Funds

Hope this is not too basic a question, but why trade American ETF's when iShares now offers quite a few off-shore ETF's on the ASX now? Is this because of a lack of sufficient liquidity on the domestic ETF front? Thanks.

Another question -- how do ETF's pay dividends and are these franked at all?
 

IFocus

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Re: ETF's - American Exchange Traded Funds

Hope this is not too basic a question, but why trade American ETF's when iShares now offers quite a few off-shore ETF's on the ASX now? Is this because of a lack of sufficient liquidity on the domestic ETF front? Thanks.

Another question -- how do ETF's pay dividends and are these franked at all?
Liquidity and tight spreads low or nil slippage etc, see chart of USO that Wayne mentioned, 5mil volume Friday
 

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Re: ETF's - American Exchange Traded Funds

Hope this is not too basic a question, but why trade American ETF's when iShares now offers quite a few off-shore ETF's on the ASX now? Is this because of a lack of sufficient liquidity on the domestic ETF front? Thanks.

Another question -- how do ETF's pay dividends and are these franked at all?
Americans have some very sophisticated ETFs like the DXD. And what the DXD does is it does 200% of what the Dow does BUT in the other direction.

So if the Dow was to go up 2%, DXD would go down 4%.

Domestic ETFs have plenty of liquidity just like BHP or Telstra but the iShares ones are long only.
 

RichKid

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Re: ETF's - American Exchange Traded Funds

Thanks for those Rich, I was using Yahoo to sort through ETFs which was quite befuddling, that will make it much easier.

I've been using USO (crude oil ETF) for trading options on oil rather than the futures options because of a more transparent market.

But I've been passively looking into these for a while too as bottom drawer stuff. Hope there is enough interest here for a discussion to get going.
Glad it's of use Wayne. It takes me hour upon tedious hour to find something when first searching for info on a new market or instrument, still got a lot to do.

USO sounds interesting. I like the trends in oil, spotted USO before but haven't fleshed it out yet, if you're using it for options trading then it must be the premier crude oil ETF. This article reminds us that some of these oil ETF's don't actually track the underlying accurately, probably an issue worthy of note for most ETF's. USO looks the goods but we'll need to overlay some charts to work out discrepencies: http://seekingalpha.com/article/67195-monthly-oil-etf-check

btw, do you mean that the futures options are subject to more manipulation than the equity eto's? Maybe a lack of liquidity? I'm not that familiar with futures options....
 

RichKid

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Re: ETF's - American Exchange Traded Funds

..........
........
Another question -- how do ETF's pay dividends and are these franked at all?
I'm yet to study the US ETF's in detail but I know that the ASX listed XJO-tracking ETF ('STW') does pay dividends with franking credits. Checkout the ASX page for more info www.asx.com.au There is also a thread on STW on ASF- please use the search tool in the toolbar to find it.

Dividend payment is an issue worth noting with inverse ETF's, I need to make sure that I wont be liable for dividends or the like if I go long stock of an inverse ETF (eg long QID, which is 2x the inverse of the cubes- QQQQ).

NB I am yet to find confirmation that the ultrashort ETF's actually provide the full 2x leverage to the downside that they boast about.

Thanks for the USO chart IFocus, very clean.
 
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Re: ETF's - American Exchange Traded Funds

Thanks for the info RichKid.

I have been looking into ETFs too as of late. Helps to have this kind of info posted, as opposed to as you put it "spending hour after tedious hour" scrolling through information!
 

RichKid

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Re: ETF's - American Exchange Traded Funds

Thanks for the info RichKid.

I have been looking into ETFs too as of late. Helps to have this kind of info posted, as opposed to as you put it "spending hour after tedious hour" scrolling through information!
It's my pleasure. Here's a bit more.

I've been looking for the best ETF for exposure to spot gold. Does anyone who is familiar with the US markets know which one of these ETF's is the premier comex gold etf?

Looking at it in terms of liquidity, transparency (ie not easy to manipulate) and correlation to comex gold I'd say it's IAU for the US and GOLD for the ASX (charts below). Note that the first listed gold etf in the world was listed on the ASX (code is GOLD) but it appears to be difficult to short unlike IAU or GLD.

GLD StreetTracks Gold Trust
IAU iShares COMEX Gold Trust

The first chart is Gold v the ETF's (note that the spread bw the ETF's varies), the second chart is GOLD (asx equity) v IAU (note that the correlation has changed over the last year or so, might be due to changing AUD exchange rate).

Comparing a canadian gold etf might be useful too due to the different exchange rates for an Aussie trader.
 

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CanOz

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Re: ETF's - American Exchange Traded Funds

Went short on this utility ETF (XLU) tonight...Entry at 36.00 with a target below 30 ish....nice H&S pattern.

Cheers,


CanOz
 

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Re: ETF's - American Exchange Traded Funds

Greetings all --

There are several different categories of ETFs. Those that follow broad markets, those that follow foreign markets, those that follow investment strategies, those that follow market sectors, etc.

One set I find very useful are the nine S&P sector ETFs. The tickers are XLB, XLE, XLF, XLI, XLK, XLP, XLU, XLV, XLY. Each one is designed to follow its industry sector -- XLE follows energy, XLF follows finance, and so forth. They are very easy to model using technical analysis methods.

If you want to trade them directly, they are very liquid -- they range from about half the daily dollar volume of BHP (the most liquid issue on the ASX) to over ten times BHP. The bid-ask spread on any of them during the trading day is seldom more than $0.01 (1 cent). And there are very liquid options on them.

Another technique is to model the sector ETF, then trade an issue that is related to it (probably a component of it), but that has a higher beta.

Thanks for listening,
Howard
 
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Re: ETF's - American Exchange Traded Funds

Greetings all --

There are several different categories of ETFs. Those that follow broad markets, those that follow foreign markets, those that follow investment strategies, those that follow market sectors, etc.

One set I find very useful are the nine S&P sector ETFs. The tickers are XLB, XLE, XLF, XLI, XLK, XLP, XLU, XLV, XLY. Each one is designed to follow its industry sector -- XLE follows energy, XLF follows finance, and so forth. They are very easy to model using technical analysis methods.

If you want to trade them directly, they are very liquid -- they range from about half the daily dollar volume of BHP (the most liquid issue on the ASX) to over ten times BHP. The bid-ask spread on any of them during the trading day is seldom more than $0.01 (1 cent). And there are very liquid options on them.

Another technique is to model the sector ETF, then trade an issue that is related to it (probably a component of it), but that has a higher beta.

Thanks for listening,
Howard
Not to mention the options on these are getting more and more liquid, much like GLD ETF!!
I love these
 
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Re: ETF's - American Exchange Traded Funds

PLEASE HELP!!!. Spent hours searching. I live in Melbourne, a new investor. Want to trade US/European ETF's. Is there any way people in Aust. can trade on the myriad of ETF's in OS market from here??? Any sites/brokerage firms I can trade thru?? I see the ASX only list 14 ETF's.
PS what's the difference between ETF's and Inverse ETF's????
Cheers Cheryl
 

Trembling Hand

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Re: ETF's - American Exchange Traded Funds

PLEASE HELP!!!. Spent hours searching. I live in Melbourne, a new investor. Want to trade US/European ETF's. Is there any way people in Aust. can trade on the myriad of ETF's in OS market from here??? Any sites/brokerage firms I can trade thru?? I see the ASX only list 14 ETF's.
PS what's the difference between ETF's and Inverse ETF's????
Cheers Cheryl
You sound desperate to buy something.

try commsec for international share if your looking for the mum & dad type broker.

If you want something more sophisticated try interactive brokers
 

CanOz

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Re: ETF's - American Exchange Traded Funds

Interactive Brokers offers trading on all the ETFs, or as many as i have ever looked for anyway. Brokerage is cheap too.

Inverse ETFs, the price actually goes in the opposite direction on the ETF. For example an inverse Bear ETF on the S&P 500 would actually rise when the indexfalls. So you actually go long the ETF if you think the index will decline.

I use like this site for all sorts of things included ETFs.

www.seekingalpha.com

Cheers,


CanOz
 
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Re: ETF's - American Exchange Traded Funds

Thanks for both the quick replies. I feel better now...been following moneyandmarkets.com last year or so & they seem to know what they're talkin about. Interested in following their $1mill. contrarian investment strategy -anyone any thoughts??? mind you don't have a mill to put in!
Cheers
 

CanOz

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Re: ETF's - American Exchange Traded Funds

I'm always intrigued by the creativity with which the fund managers come up with ETFs in the US.

There are two new ETFs in the US that i thought may interest some here...

One is FLAG, and its a forensic accounting ETF. I find this one interesting as you can use it conjunction with a momentum trading strategy like the 20% Flipper. Trade the Flipper on the S&P 500 and filter the picks by using the FLAGs holdings. So in other words, pick stocks that meet the flipper criteria but also meet the FLAG criteria. Difficult to back test but to me its easy way to trade momentum on great quality companies.

The other one is HDGE, its a short only ETF that is like the mirror opposite of FLAG. It picks the S&P 500 companies with the worst accounting practices....hopefully McLovin, Craft or Ves.. might pick up on this post and could give a nice layman's explanation of forensic accounting...

The other thing that would be interesting is to use both ETFs as a strategy. Something like, using the S&P 500 and a 50 MA as a filter. If the index is above the 50MA then you buy FLAG. If the index is below the 50 MA then you buy HDGE.

These are both new ETFs but I'm just curious what this regime switching might do with the added twist that the two ETFs add.

Food for thought...

CanOz
 
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Re: ETF's - American Exchange Traded Funds

The other one is HDGE, its a short only ETF that is like the mirror opposite of FLAG. It picks the S&P 500 companies with the worst accounting practices....hopefully McLovin, Craft or Ves.. might pick up on this post and could give a nice layman's explanation of forensic accounting...
As far as I know, you call in forensic accountants when a company goes belly up and you need to prove the Chairman's wife spent $400,000 on baths and grooming for her toy poodle so you can sue them etc. It's something you do after the fact. There's a few hedge funds that work on similar principles although they target frauds and short them, rather than using their findings to exclude stocks from their portfolio. I knew some forensic accountants in London, they had some wild stories about having helicopters on standby and being forced to leave countries in the middle of the night because the President didn't like what they were doing and was "concerned for their safety". Certainly beats auditing!

I guess from a marketing perspective "forensic" sounds better than "prudent", which might explain the choice of fund name.:D
 

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