The stock market is many things to many traders. Simply speaking, it’s all about choices. Not only choices traders make when making a trade, but the choices made on what to trade. Stocks, options, forex and futures are all trading vehicles. But for many, the risk is too high or the payoff is not high enough to draw interest. In the middle are Exchange Traded Funds (ETFs), a trading vehicle that is relatively low risk with a payoff that is often quite substantial. With ETF trading, traders get the benefit of owning a mutual fund without having to pay the expensive fees or abide by time-limit rules.
What are ETFs?
As defined by Investopedia, An ETF is a security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like common stock on the stock exchange. ETFs experience price changes throughout the day as they are purchased and sold. ETFs have higher daily liquidity and lower fees than mutual fund shares. This makes them an attractive alternative for individual investors.
Benefits of Trading ETFs
Traders are not interested in the net asset value of an ETF. Just like common stock, they are interested in the current and future daily price. Here are the top 3 benefits to ETF trading:
- ETFs experience price changes throughout the day so traders can set up a trading plan as if they were any other vehicle. Traders can sell short, long, buy on margin, and can purchase as little as one share.
- ETFs typically have higher daily liquidity and lower fees than mutual fund shares. This makes ETF trading a solid alternative for traders who like to spread out the risk.
- ETFs are no different than other asset-based markets. You pay a commission to your broker just like any regular order. However, many brokers have started to offer zero-commission trades, which makes ETF trading even more appealing.
ETFs have worldwide reach
Another advantage to ETF trading is that they are globally traded including markets in Canada, China, the United Kingdom, Japan, Brazil, Germany and Hong Kong.
With its cutting-edge and patented technology, VantagePoint trading software mines global market data based on intermarket analysis and applies the pattern recognition capabilities of Artificial Intelligence to produce proprietary, leading technical indicators that look ahead, not backwards for the ETFs you trade. In our interconnected global trading world, this is a huge asset!
Let’s analyze the impact of oil. Although the profits earned by trading the oil futures are highly sought after, futures trading isn’t for everyone. The capital requirements, volatility, and the expertise required to trade the futures markets makes ETF trading a more suitable option for stocks traders. ETFs give traders ability to capture profits with oil futures while trading them like a stock.
Notice how VantagePoint indicated both uptrends and down trends in the ETF United States Oil (USO) before they occurred. By utilizing Artificial Intelligence to analyze the impact of global markets, VantagePoint has the ability to combine past price data with predictive data giving traders the opportunity to gain 30% profit in two short months.
If you’re looking for a way to diversify, trade one-on-one, and get a low cost for the trade, consider ETF trading. Put the revolutionary power of AI to work for you.
Let VantagePoint help you predict the best ETF trades for your portfolio.