{"id":3744,"date":"2008-08-25T13:26:48","date_gmt":"2008-08-25T18:26:48","guid":{"rendered":"http:\/\/magic1host.com\/blog\/2008\/08\/25\/what-are-etfs-are-those-stocks\/"},"modified":"2008-08-25T13:26:48","modified_gmt":"2008-08-25T18:26:48","slug":"what-are-etfs-are-those-stocks","status":"publish","type":"post","link":"https:\/\/magic1host.com\/blog\/?p=3744","title":{"rendered":"What Are Etfs? Are Those Stocks?"},"content":{"rendered":"
by Jesse Profit<\/div>\n

What are Etfs? Are those Stocks? That is a commonly asked question. The answer is no so cut and dry. The fact is that sometimes they are both. Confusing, isn’t it? Let’s see if we can’t explore this subject and maybe clear up some confusion.<\/p>\n

What are ETFs? Are those stocks? Free charts and quotes are available in a variety of places on the internet and the usual stock trading tools generally apply so it’s easy to expect that since they behave a bit like stocks, that they must be stocks.<\/p>\n

ETFs are in fact exchange-traded funds. They’re traded on markets like stocks, but aren’t really stocks themselves. They’re more like a mix of mutual funds and a closed-end fund, which in and of themselves aren’t really considered to be “exchange traded.”<\/p>\n

Mutual funds are bought and sold at the end of the day, based on the results of the day’s trading. And closed-end funds are bought and sold throughout the day at prices that don’t reflect the actual value of the fund’s assets. A closed-end fund isn’t an exchange traded fund, though they’re funds that are traded on an exchange.<\/p>\n

So if closed-end funds aren’t ETFs, what are ETFs? Are those stocks? ETFs are funds made up of securities and other assets. This makes them much like a mutual fund in structure, but because they can be traded throughout the day, they can be bought and sold like stocks.<\/p>\n

Financial institutions cannot buy exchange traded funds like Efts by the share. They have to purchase them by “creation units”. That is blocks of tens of thousands to hundreds of thousands. The practice of buying in bulk limits variation between the actual value of the asset and the purchase price of the units. This is in contrast to the way that stocks are traded.<\/p>\n

So, what are ETFs? Are those stocks? They’re for easy diversification of investments, maintaining low expense ratios and tax efficiency, while still keeping the basic features of stocks. You can still short sell them, put limit orders on them, or sell options on them. You can, in essence, treat them much like stock.<\/p>\n

Investing and finance can be confusing. It is general rule that if you don’t understand how specialized investments work, then don’t invest in them until you do. If this article has still left you scratching your head, it may be wise for you to invest in something you are knowledgeable about and comfortable with. If you still want to invest in Efts, make sure you have done all your homework and understand the process.<\/p>\n

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About the Author:<\/div>\n
To find out how more about stock market classes<\/a> and trading courses<\/a> please visit my site. Good Trading!<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

What are Etfs? Are those Stocks? That is a commonly asked question. The answer is no so cut and dry. The fact is that sometimes they are both. Confusing, isn’t it? Let’s see if we can’t explore this subject and maybe clear up some confusion.<\/p>\n","protected":false},"author":480,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[77],"class_list":["post-3744","post","type-post","status-publish","format-standard","hentry","category-business","tag-business"],"_links":{"self":[{"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/3744","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/480"}],"replies":[{"embeddable":true,"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3744"}],"version-history":[{"count":0,"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/3744\/revisions"}],"wp:attachment":[{"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3744"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3744"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/magic1host.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3744"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}