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What are Double and Triple ETFs?
Double and triple ETFs are also known as leveraged ETFs, and their goal is to magnify the performance of the index they follow. Using futures contracts and other derivative instruments, 2x or 3x ETFs attempt to magnify the performance of an index, with the goal of achieving the result daily. Because they also compound daily, they are not usually held for more than a few days. These are also called leveraged ETFs because they use margin, futures contracts, and other derivative instruments to give an investor this magnified exposure. They give you two or three times (respectively) the profits but also two or three times the losses, so one must be very cautious when dealing with them. Continue reading...
What are 3x ETFs and How Do They Work?
Triple-leveraged ETFs (3x ETFs) promise thrice the returns, but with that promise comes a maze of risks. These unique investment instruments amplify gains and losses, making them a double-edged sword in the financial world. From the nuances of daily resets to the pitfalls of compounding, 3x ETFs are not as straightforward as they seem. This article delves deep into the world of 3x ETFs, shedding light on their construction, the role of derivatives, and the lurking dangers. Whether you're a seasoned trader or a curious investor, this comprehensive guide offers invaluable insights into the triple-leverage game. Continue reading...
What Kinds of ETFs Exist?
There are many ETFs on the market and more popping up all the time. Currently, there are over 900 ETFs available on the market, covering basically every market sector, industry, commodity, asset class, country, style of investing on the stock market. The amount of money invested in ETFs has increased exponentially over the last decade and is likely to continue in that direction. Many more ETFs are introduced to the market every year, many with different and creative strategies that have never been available in a single investment product before. These might use Forex, rate swaps, CMOs, futures, options, short-selling, and other advanced or institutional trading strategies, to create a new kind of position in a sector, industry, or geography to which the investor wants to gain exposure. Continue reading...
What is an Accelerated Return Note (ARN)?
An accelerated return note (ARN) is an unsecured debt instrument that uses derivatives to offer leveraged returns and minimal loss exposure to retail investors. Accelerated Return Notes came onto the scene around 2010-2012. They are a form of structured note marketed primarily by Merrill Lynch and Bank of America. They were packaged as offering “accelerated” returns on familiar indexes and stocks. The way such returns are generated is by taking up 2x or 3x positions in calls and futures on the index or stock of choice. Continue reading...
What is an ETF? Definition
ETFs are very popular and useful investment vehicles that offer affordable diversification and professional portfolio management. An ETF is a basket of securities that is designed to ‘mimic’ the performance of an index, sector, or category of securities. For example, the ETF with ticker SPY is designed to track the performance of the S&P 500, and the company that creates the ETF (in this case Barclays iShares) builds the ETF simply by purchasing the 500 stocks in the S&P 500. Investors can purchase shares of the ETF as a means of gaining instant access to all 500 stocks in the S&P 500, thus tracking its performance. Continue reading...
What is a bear market?
Bear markets are loosely defined as periods when markets experience declines in magnitude of 20% or more. More specifically, bear markets are a period in which a major index like the S&P 500, for example, declines by 20% or more, with this decline sustained for a period over two months or so. Consequently, many investors become “bearish” – they lose confidence in the market, sell off their securities they do not believe will recover soon, and sit on the sidelines. There have been 25 bear markets since 1929, for an average of one every 3.4 years. Continue reading...
Which ETFs Are Ideal for Contrarian Investors Anticipating a Summer Fade?
Wall Street surged ahead in June. The S&P 500 Index registered its best return for the month since 1955 – adding 6.9% – while its industrials counterpart, the Dow Jones Industrial Average (DJIA), logged a 7.2% gain to record its most impressive June since 1938. Last month's stellar performance even prompted U.S. President Donald Trump to take some credit for the buoyant stock market. "Stock Market is heading for one of the best months (June) in the history of our Country. Thank you Mr. President!," he tweeted. Continue reading...
Week (April 15 - 19) in Review: Financial Leaders
Explore this week's dynamic financial market movements with Tickeron's comprehensive review. From the significant gains in inverse ETFs reflecting bearish sentiments to the notable declines in cryptocurrencies and tech sectors, understand the shifts driving current market trends. Dive into sector-specific analyses and global ETF performances to better navigate your investment strategies in these volatile times. Continue reading...
What Is the UltraPro Short QQQ (SQQQ) ETF?
In the world of Exchange-Traded Funds (ETFs), where investors have access to a wide array of investment strategies, the ProShares UltraPro Short QQQ ETF (SQQQ) stands out as a unique and intriguing option. Launched in February 2010 by ProShares, this inverse-leveraged ETF has garnered attention for its focus on delivering results that move inversely to the Nasdaq 100 Index. In this article, we will delve into the details of SQQQ, examining what it is, how it operates, its performance, advantages, disadvantages, and the best use cases for this specialized investment vehicle. Continue reading...
What are Bear Market Funds?
Bear market funds are designed to profit when the market or sector they follow declines. Bear Market Funds make money in declining markets, as opposed to Bull Market Funds. If you’re bearish on a sector, industry, commodity, the market, or anything else that’s tradable, rest assured that you’ll find a Bear Market Fund for it. There are also 2X Bear Market Funds, 3X Bear Market Funds, etc…, which use margin, short-selling, and derivative instruments to acquire large leveraged positions. Continue reading...
What is the Direxion Daily Gold Miners Index Bull 2X (NUGT) ETF and How Does It Work?
The Direxion Daily Gold Miners Index Bull 2X Shares (NUGT) ETF is a high-risk, high-reward financial instrument tailored for short-term trading. With its leveraged returns based on the NYSE Arca Gold Miners Index, NUGT offers traders the potential for significant gains, but not without substantial risks. This guide delves into the intricacies of NUGT, from its investment strategy and inherent risks to its historical performance. Whether you're a seasoned trader or just curious about leveraged ETFs, this analysis provides a comprehensive overview of NUGT's role in the financial market. Continue reading...
What is a pivot point?
A pivot point is a technical indicator used by traders to determine overall market trends over various windows. This indicator used to be solely the average of the high, low, and closing prices of the previous day, but modern trading utilizes different versions of this concept for day trading and short term analysis. In many cases, pivot points are now quick-reference tools used in intra-day trading that give the trader benchmarks and perspective as short-term price movements happen. How the trader calculates the pivot point depends on whether the point is going to be part of a chart with a scope of several minutes or the present day or present week. Continue reading...
What are Pivot Points?
Pivot points are quick-reference tools used in intra-day trading that give the trader benchmarks and perspective while short-term price movements happen. Pivot points are set by taking the high, low, and close price levels of a stock market index or individual security for the previous day or week and basing support and resistance levels from there by multiplying those numbers by simple factors. These multiple might be very simple, such as 2x or 3x, or using Fibonacci numbers, which is still a simple calculation if you have the Fibonacci numbers. These are meant to be very quickly generated on a piece of scratch paper, and because of their simplicity, they were a favorite among floor traders. Continue reading...