McCabe

Chart-Topping Currency ETFs with Technical Strength

I couldn't agree more. Finally, someone understands the fundamental use for these products. The FXA is a demand deposit account held at JP Morgan that pays a yield as dividend. The other thing that people should be looking at is covered buy-writes. You can buy 100 shares of FXA than sell 1 slightly out of the money call. This gives clean non US Dollar exposure and reduces risk, while capturing time premium on the option. Call your own experts but it seems like a good idea to me.

ProShares, Direxion Are Not ETFs So Let's Not Call Them That

Finra gets it right!

Regulatory Notice 09-31
FINRA Reminds Firms of Sales Practice Obligations Relating to Leveraged and Inverse Exchange-Traded Funds
Executive Summary
Exchange-traded funds (ETFs) that offer leverage or that are designed to perform inversely to the index or benchmark they track—or both—are growing in number and popularity. While such products may be useful in some sophisticated trading strategies, they are highly complex financial instruments that are typically designed to achieve their stated objectives on a daily basis. Due to the effects of compounding, their performance over longer periods of time can differ significantly from their stated daily objective. Therefore, inverse and leveraged ETFs that are reset daily typically are unsuitable for retail investors who plan to hold them for longer than one trading session, particularly in volatile markets.

This Notice reminds firms of their sales practice obligations in connection with leveraged and inverse ETFs. In particular, recommendations to customers must be suitable and based on a full understanding of the terms and features of the product recommended; sales materials related to leveraged and inverse ETFs must be fair and accurate; and firms must have adequate supervisory procedures in place to ensure that these obligations are met.

Questions concerning this Notice should be directed to the Office of Emerging Regulatory Issues at [phone].

Friday Options Update: EEM, DRYS, SLV, GLD, DHI, BRCM, STSI, LFC

I scratch my head and wonder why more traders and investor don't take advantage of the CurrencyShares platform. The structure is almost identical to GLD, except the currencies pay a yield as a dividend. With the movement of the Aussie Dollar the FXA has been screaming. The nine currencies offered have options available, the possibilities are endless. I have been recommending a simple buy-write strategy on FXE, FXA and FXC.