It is generally agreed that the ProShares long/short and ultra-long/ultra-short ETFs are good vehicles for both hedging and short term trading.
One voice of dissent is from those who are adept at trading options. Their point is that options are cheaper and can provide more leverage. The variety of option strategies (puts, calls, butterflies, straddles, buy/write, LEAPs, etc.) can provide more flexibility. There are also a much larger number of stocks, each with an associated options chain, to choose from while there are only 64 ProShares ETFs, for example, currently on the market.
For the individual investor, though, the ease of use derived from the ETF approach may outweigh the benefits of using options. In the case of the ETF, an investor does not need to choose an expiration date or a strike price.
Now that ProShares has expanded their offerings with ultra-long/ultra-short sector ETFs in addition to the ETFs that track major market averages, investors now have the choice of choosing numerous different types of indexes against which to hedge or speculate. Still, compared to the nearly overwhelming choice of options, ETFs make the selection of the appropriate vehicle much more straightforward.
Thursday, July 10, 2008
Options or ETFs - which is better for the individual investor?
With the S&P 500 falling to a fresh two-week low, the big question is whether this is a correction, or the start of a major trend on the downside?
Our friends at MarketClub have just finished a short video that details many of the key concerns that we have for this market. If you have not seen one of their videos before you may enjoy this one. This video does not require a plug-in.
The video is free to watch and there is no need to register. I would love to get your feedback about this video on our blog.
I highly recommend students of the market take a few minutes and watch this timely video. Even if you’re a seasoned pro you may find what you see interesting and therefore profitable.
As always, this informative video is complimentary with no strings attached.
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1 comments:
Did you visit the site with a free options trading course? - As they say: "You make money whether the market goes up, down or sideways"
-- http://www.tradeologists.com
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