Topic
ETFs
Gold funds, inverse and leveraged funds, and the mechanics that decide whether a fund does what its name says over the period you hold it.
An ETF name tells you the target; the prospectus tells you the method. A gold fund might hold bars in a vault or shares in mining companies. An inverse fund aims for the opposite of one day's index return, which is a different thing from the opposite of a month's. The lists set the main funds side by side, and the strategies explain what each design means for a trade.
The leveraged ETF decay calculator shows how a daily-reset fund drifts from its multiple over a run of up and down days.
Strategies
Comparison
Gold ETFs or Gold Miners: Which One Holds What You WantBuy bullion ETFs to hold gold itself; buy miner ETFs only if you want a leveraged bet on gold that also rides on how the companies are run.
Verdict
Inverse ETFs Reset Daily: Why Holding One for Weeks DriftsTreat inverse ETFs as tools for days: close or rebalance them on a schedule, and size them for the loss one bad day can bring.
Verdict
Swing Trade ETFs Before Single Stocks: The Case for Starting ThereLearn to swing trade on liquid index and sector ETFs, and move to single stocks only once your process has been tested.
Guides
Definitions
- ETF premium and discount
The difference between an ETF's market price and its net asset value per share, shown as a percentage: a premium when the price is higher, a discount when it is lower.
- Tracking error
The variability of the gap between a fund's return and its index's return over time, usually measured as the standard deviation of that gap.
- Volatility decay
The drag on a daily-reset leveraged or inverse fund when its index moves up and down, because each day's percentage move is applied to a new base.
Calculators
- Leveraged ETF Decay Calculator
How a daily-reset 2x, 3x or inverse fund drifts from its multiple of the index over a run of days.