In February 2012 VelocityShares‘ TVIX ETN was on a tear. Its volume surged from an average of 6.67 million shares a day in January to 22 million shares a day in February. The assets under management (AUM) also grew dramatically. At the end of January TVIX had $413 million in assets—fourteen days later it has $279 million more for a total of $691.0 million. Credit …
IRAs are attractive to investors because they enable taxes on dividends and profits to be deferred (traditional IRA) or avoided (Roth). To a large degree, you can do the same trades in an IRA that you can do in your regular accounts. However there are significant differences, and the differences change over time as brokers adjust their policies and their software. I’ve tried …
There are over 2800 ETFs right now, with more in registration. This explosion of alternatives is great for driving down fees and giving investors choices. However once we figure out what we want to buy, we often discover the fund we chose is lightly traded—perhaps only hundreds of shares are traded on any given day. With a lightly traded fund, the bid/ask spread is usually …
Covered calls are an example of positions that are short volatility. I hadn’t thought of it that way until Sheldon Natenburg, the author of Option Volatility & Pricing pointed that out in a fascinating interview in Expiring Monthly. A covered call position is profitable if the underlying equity stays the same or goes up, but in a big market downswing, when volatility spikes up, the modest …
The vibe of the IndexUniverse’s InsideETFs Conference in Hollywood Florida I attended in 2012 was one that I have felt before—a group that knows they’re changing the very structure of their industry. It’s not just about being new, creative, or disruptive—it’s the sense of knowing you have won. The mutual fund industry is still almost 10 times the size of ETFs/ETNs with $7.9 trillion in assets vs …
