ETFexpert

UBS Suspends Leveraged ETFs; Is Wells Fargo Next?

Two Words:
Option Agreement.

UBS Bans Sale of Leveraged, Inverse ETFs

OK, here is the solution to a not so complex issue. When Options were introduced I AM SURE the entire brokerage firm industry had second thoughts about them, too. Just require investors to sign an Option Disclosure Agreement. For that matter even the less sophisticated Financial Advisers, Brokers, Account Executives (Or whatever they’re called this week) should be required to have a formal understanding of these ETFs. There problem solved…..This is from our friends at Investopedia….. Option Disclosure Document…What Does Option Disclosure Document Mean? A publication issued by the Options Clearing Corporation (OCC) that first-time option traders are required to read before being allowed to make any option trades. The document prepares traders for the options market.

Why ETFs Are a Scam

Honestly, I don't know who knows less about the construction of an ETF....you, Jim Cramer or his Shill Oberg. OUCH! I am sure you're a smart man but you really need to read a few books on ETFs. Start with this one: All You Need to Know About Exchange-Traded Funds by Richard Ferri
This book is a good start he covers the creation/redemption process very well. The next place you can go is to... let's say....iShare's website and (take your time) click all through their site....they have some AWESOME information. You know they even have a spot in there on how you can actually find out what is in the ETF. No kidding...it is in there. I don't want to get into the premium-discount model here and how the ARBs take care of that for ETF users. I'll save that for ETFs 201

You wrote: "Those assets can vary widely throughout the trading day and are not usually made up of actual stock shares – but rather a series of options, swaps, forwards and a host of other derived securities, in amounts and proportions that only the specialists and the managers of the ETF know about."

This makes no sense at all. It is like saying I don't own stocks-- I own mutual funds. I'd have you call some "specialist traders" firm's...but they don't work anymore. They got their names changed to LEAD MARKET MAKERS. That happened when the NYSE bought the AMEX. You remember that, it was in all the papers. Lastly: Try this website....it will learn ya as to the workings of the SKF. You know the DOW JONES Financial Index.
www.djindexes.com/mdsi...

In all honesty, if you take a fee for your services I hope you give a lot to charity.

Rick Santelli: The Best Five Minutes in CNBC History

Mindless dribble....Again and again.....

I ALMOST LOST MY LUNCH TODAY WATCHING.......
James "con-man CRAMER,
JACK "Blowhard" BOGLE
JEREMY "all but financial-Dividends" SIEGEL.

Berkshire Hathaway's (Warren Buffett) Portfolio Update: Q4 2008

I don't know...if I had a "legal" responsibility of $50 Billion for my shareholders, as Mr. Buffet does, in this environment I would be hard pressed to deploy my cash in anything other than under my bed.

In the words of our friend Art Cashin....."he's keeping his wallet on his hip" or (another Art'ism) "keeping his powder dry"

To throw stones at Warren is like saying Hank Aaron couldn't hit an inside slider.

Lawrence Carrel Sets the Record Straight on ETFs

As far as Mr. Cramer is concerned....if you haven't seen these posts take a look. I found them shocking to see and hear his blatant manipulation of the facts.

www.youtube.com/watch?...
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Ultra ETF Promises Fall Short

Squark62......oppps, my bad!! I thought you were busting on me!!

Harley Davidson's Yield No Longer Brings Home the Bacon

It's hard to bet against Harley.
It's like saying no more Mom and apple pie.
Maybe Warren Buffet's Berkshire could buy them.

Cramer's Lightning Round - Don't Be Fooled by DryShips (2/12/09)

I was just shown this today. Take a look and then decide if Mr. Cramer is a "showman" or "financial wizard".

www.youtube.com/watch?...
www.youtube.com/watch?...
www.youtube.com/watch?...
www.youtube.com/watch?...

Just watch them and see for yourself.

Ultra ETF Promises Fall Short

SQUARK62:

Please note......Under the EXAMPLE section of this piece written by Tom Knorad. The first full paragraph starting with.... Based on data from October 22, 2008.......

Read that section where the author says " and were to hold it for a year"

Sir, this is what I was referencing.....in my comment re: TRADING TOOL.

Webster's dictionary defines HORSE SENSE as: common sense.....yes sir, I do have COMMON SENSE and know NOT to hold these ETFs for a year.

.

Ultra ETF Promises Fall Short

If you were to invest in SDS, an UltraShort ETF which has the S&P 500 as its underlying index, and were to hold it for a year,

DO NOT HOLD THIS FOR A YEAR. IT IS A SHORT TERM TRADING TOOL, WHEN THE HECK ARE ALL THESE SO CALLED SMART "BLOGGERS" GOING TO GET IT????

The Hidden Cost in Inverse ETFs

I agree, these aren't "buy and hold" ETFs. Also, a nice pair trade might be the IVV and the SH. Two longs, no margin..... The corr of SH to IVV is a tad higher.

In Defense of Leveraged ETFs

I love them,
use them and most importantly
make money with them. Oh, and not to mention.....
REBALANCE them.

Show me a hedged position that isn't rebalanced..... and I'll show you an "L" in the P/L.

Proposed VIX ETNS Are Not a Volatility Bet

Darn, the graph that I made didn't print. SHOOT!! Anyway, you were correct. My graph showed a huge sell off in Ocotber...a little more in November and basically flat in December.

Proposed VIX ETNS Are Not a Volatility Bet

Hey Don: ETF Expert here:
Good work!! I stand corrected.
I looked at your research and did a little of my own. The prices that you referred to in your graph were interesting. I went back and looked at the open interest on the VIX futures, same dates. (See graph)

And to my surprise we saw a huge unwinding in the contracts towards the end of the year. To me, this is interesting. Now to the credit of our friends with IndexUniverse’s article under “planned rotation” Barclay’s is offering two ETNs. One short term and the other a longer term, weighted at one month and five months respectively. Based on your graph do you think the end of year pricing would have been rectified in January? You know as contracts roll forward. Just asking??
Am I understanding your comment here that….. Because of the lack of arbitrage between the VIX index and its corresponding futures, VIX futures (and the proposed ETNs) are not a bet on volatility.
Per the Barclay’s prospectus: “The redemption feature is intended to induce arbitrageurs to counteract any trading of the iPath ETNs at a premium or discount to their indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner.”

Can you help me here, so what you’re saying is that an ARB will not participant? I thought that ARBs prefer “products” that have a Futures contract behind them. That way they can lay off the risk simultaneously as they close the premium/discount spread down. Am I missing something here? Let’s agree to disagree on this one; my bet is they will “ARB” anything out there that makes them money.

Refer back to my comments about the Merrill Lynch Focus 20---that too was late to the party. At first glance I thought that these ETNs were a “VOL-Play” they may still be, the jury is out. But I agree with you one needs to be very careful when using products like these. People need to think of the wrapper--- a futures product that has no instruments behind it, traded like an equity. If that isn’t around Johnson’s Barn then nothing is. I still say…let’s see what the pros do with them.