Frequently I see people complaining that their Exchange Traded Fund (ETF) or Exchange Traded Note (ETN) is broken. Occasionally they’re right, but most of the time they’re not. Before complaining, here are some things to look at: Are you looking at the right index? All Exchange Traded Products (ETPs) track an index, which is identified in their prospectus, and in the fund’s fact sheet. Don’t …
In 2010 I set out to prove that I understood the indexes that underlie the volatility Exchange Traded Products (ETPs). I developed a spreadsheet that uses the CBOE’s historical VIX Futures data to produce the short term (1 to 2 month) and medium term (4th through 7th month) rolling volatility indexes. The heart of these indexes is the daily roll of VIX futures contracts. At …
There are lots of valid ways to look at the market. Obviously, price is important, but a number alone (e.g., 1487.85—the Feb 25, 2013, S&P 500 close) doesn’t mean much. Price related metrics like percentage changes and support/resistance levels add value, but adding time as a factor enables some really interesting measures like moving averages and momentum trackers. My favorite time-related metric is term structure—how the …
Exchange Traded Funds (ETFs) look a lot like stocks because they trade during the day, can be sold short, and have options and they look a lot like mutual funds because they aren’t tied to a single company. The items are important things to know. There’s more to ETF cost than the annual fee If you aren’t planning to just buy and hold your ETF investment …
For several years I’ve periodically tried—and failed to find quotes for the CBOE’s VIX® index on Google Finance. It seemed absurd, but I expected the king of search would pull up one of the more popular indexes if they had it. It turns out that I needed to go to the 11th entry on the 2nd page of search results to find the ticker: INDEXCBOE:VIX Once …
