Tuesday, July 01, 2008

The Wonderful World Of ETFs

Over the last few years I've placed my focus on trading ETFs rather than stocks. I'll still look at stocks such as GOOG or AAPL but I'd much rather focus on ETFs because they represent a broad basket of stocks and they also allow us to participate in commodity trends.

In this post I'd like to show some charts of ETFs that many of you might not be aware of. So here we go!




Above is the ETF for Natural Gas. Last January I posted on this blog that I was looking for a big bull market in natural gas but many of you couldn't trade this market because you didn't have a futures account. Well as an alternative you could have bought UNG which is the ETF for Natural gas and done quite well. Keep this ETF in mind the next time you see a trade in Natural Gas.




As most of you know I've been bullish on gold these past few weeks and so far I've been very fortunate to have the trade rapidly move in my favor. If you wanted to participate in this trade you could have bought gold futures or GLD which is the ETF for gold. What many of you are no aware of is that there is an ETF that moves twice as much as GLD! That's right, more bang for your buck but where there is more reward there is also more risk so keep that in mind too. The symbol for this volatile gold ETF is DGP.



The grains have been in a very strong uptrend and in the past the only way to profit form such a move would be to speculate in the futures market. Thanks to an ETF by the symbol DBA we can now participate in such moves without having to trade futures. DBA's movements are influenced by moves in corn, wheat, soybeans and sugar. DBA's average volume is about 2 million shares a day which is pretty good.

To save space I'll just mention a few more ETFs that I watch without posting the charts.

Metals:
Gold- GLD, DGP
Silver- SLV
Copper- JJC
Platinum- PTM
Steel- SLX

Currencies:
Euro-FXE
Swiss Franc- FXF
British Pound - FXB
Japanese Yen- FXY

Energy:
Coal-Kol
Crude Oil- USO
Natural Gas- UNG
UGA- Gasoline

There are many more ETFs that allows us to participate in international markets and major indices but for now I hope this post opened your eyes to other opportunities that are out there and hopefully you will be able to take advantage of them.

5 comments:

mediancycle said...

Good morning kevin

witch is the better broker for ETF thank's - i'm in euro area

Ray

Anonymous said...

Hello Kevin,

Where could I find a list of all the ETF's and their composition?

Many thanks for your blog, I like it.
Domingo

gary said...

Is it time to short DBA?

Anonymous said...

Kevin,

Love your comments and thanks for making time for the small investor. Is there an ETF I can use to bet on a wider/steeper US treasury yield curve? If I use SHY/TLT I am not sure of the correct ratio...thanks!

Anonymous said...

Kevin,

WARNING - WARNING - WARNING !
These are not normal ETF's They are PARTNERSHIPS that have horrible income tax problems. They report substantial income to the IRS that you never get. You can see this in their prospectus. If you MUST trade these things, do it in an IRA. I experienced these problems with DBA, DBC, USO, UNG. There are many others that are partnerships, mostly commodity related ETF's.

Fred

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