PM ETF beginners thread

tneig

So what types of PM ETFs are better for longer term, not used as day trades?

Isn't that the better type to include in an IRA port..

derryb

non-leveraged for longer holding, most popular are SLV and GLD. Leveraged ETFs are nothing more than bets (two or three times the price movement percentage) that can work well in an IRA account if you fully understand the settled funds rule. the beauty of the leveraged ETFs is that many of them have an "inverse" counterpart (AGQ vs. ZSL or USLV vs. DSLV) that allows one to basically short an asset using an easily traded EFT. A good trader would buy AGQ at silver bottoms, sell at silver tops and buy ZSL for the ride back down to the next bottom.

IRA accounts have an IRS "settled funds" rule that requires a buyer to hold a position until the funds used to buy it are "settled." Settlement usually takes 3-4 days. For this reason it is best to not use funds from a recent sell to buy until the funds from the sell have settled. Otherwise a buyer may be stuck in a falling position waiting for the funds to settle. This rule is applied to IRA accounts to keep them from being used for daytrading. The day of settlement frees up the unsettled funds regardless of time of day.

Learn about ETFs

Easiest way to explain an Exchange Traded Fund is to think of it as a mutual fund that trades like a stock. Unlike mutual funds, ETFs can be traded directly by the individual anytime the exchange is open for trading. Like stocks, ETFs have an exchange symbol that is treated just like a stock symbol by the exchanges.

OPA

Thanks derryb for an easy to understand short lesson. If you nap like I do in the afternoon, I would not recommend a leveraged fund...."If you snooze, you loose" comes to mind. Today, would have been a perfect example