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Are ETFs the better stocks? No, but ETFs are technically stocks and that is their greatest beauty. If you know how to handle stocks, you are also fine with ETFs. Due to the fact that under the hood they are funds, the risk of "bankruptcy" of a single ETF is minimal. There is the risk of financial failure somewhere down the road of the value guaranteeing structures, but that is smaller than the one for a company coming out with terrible earnings news over night. There are special ETFs that are not only a bunch of different stocks but are synthetically linked to some sort of index. There is a virtual zero mark where the ETF should go into negative price territory, but because it is a stock, it obviously can't go there. Thus these ETFs have the character of options, but without the value-crunching duration that makes trading pure options so hard. There are some caveats with using stock methods for at least some ETFs. Basically they are the same as with stocks traded abroad. One has to take into account that gaps overnight occur more often, because the underlying market gets traded outside the trading hours of the exchange the ETF trades on. The quoTrader system is usable for ETFs and stocks: To some extent it is also useful for swing trading some commodities and financial futures, because these markets have also a natural overnight pause. For the same reason the system is less suited for Forex. |
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