ETF's or Exchange Traded Funds
What is an ETF?
An ETF or Exhange Traded Fund is a composite index essentially which is made up of other stocks or a collection of assets that trades like a single stock. ETFs can be an index, commodity, basket of bonds, or collection of stocks. In this way, ETFs function like mutual funds. Unlike mutual funds, however, exchange traded funds trade like common stock on the stock exchange, and experience price changes throughout the day as ETFs are bought and sold.
How do I trade ETF's?
ETF's can be traded just like stocks and futures where you are buying a share outright to hold with the outlook that the price will go higher and you will sell it back for a profit. You also have the choice on most ETF's to trade option strategies on them. You can trade simpler and complex strategies on these instruments just the same as trading options on stocks. Most of our traders will utilize options strategies such as buy calls, selling puts, trading vertical spreads, butterflies, iron condors and more. Ideally you would be trading options strategies best suited for your account, trading plan and risk tolerance.