The Flexibility of Exchange Traded Funds:
An Exchange Traded Fund, commonly referred to simply as an ETF, is a financial instrument that tracks an index, commodity, bonds, or basket of assets. ETF’s experience price changes throughout the day as they are bought and sold on exchanges – much like common stocks. In general, ETF’s offer high-liquidity alternatives to traders and investors alike. Some of the most popular ones with the highest average daily volume include GDX, EEM, JNUG, JDST, UVXY, DGAZ, UGAZ, DUST, NUGT, LABD, and LABU.
Leveraged ETF’s and Inverse ETF’s offer flexibility that singular stocks cannot. For traders/investors looking for increased volatility and quicker returns, leveraged ETF’s can provide just that. And if you think ETF’s are limited to one market direction (bullish or bearish), inverse ETF’s are available in order to capitalize on moves in either direction. In other words, “shorting” the underlying assets of an ETF through an inverse ETF is much easier than shorting a singular stock, which involves the often difficult task of finding shares to short with your broker, as well as incurring theoretically infinite risk.
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