1 Mar 2016

The Inside Story on Trading Costs

Some things are easy to measure, like the internal costs of a mutual fund or exchange traded fund (ETF) or how much we spend in commissions at our custodian to buy or sell stocks, bonds, mutual funds and ETFs. It’s much harder to measure the market impact of your trading, or how much you pay as a price-taker (like us) between the price to buy a security (the offer) and how… Read More

2 Sep 2015

Downside Protection That Doesn’t Protect

After reading my article last week (that can be found here) that discussed how we use limit orders to protect us from wild price fluctuations (among other reasons), one of my favorite readers wanted to know why we don’t use stop-loss orders. A stop-loss order is different from a market order, which says ‘do my trade at any price’ and a limit order, which says ‘do my order at a… Read More

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28 Aug 2015

When Trading Goes Haywire

In Tuesday’s Daily Insights, I described trading on Monday as chaotic.  Not only were stocks down sharply, and volume heavy (it was the second most active trading day in history with $630 billion in stocks traded) but many stocks behaved erratically and a number of exchange traded fund (ETFs) prices became wildly disconnected from the market value of their holdings. A quick primer: ETFs are like mutual funds in that… Read More

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1 Jun 2015

ETF Deathwatch

Not too long ago, someone sent me an advertisement for an exchange-traded fund (ETF) that tracks the global airline industry.  The ticker for the ETF is very cute: JETS. Personally, I think an index that tracks the airlines industry is nuts.  Although it can’t be attributed to anyone specifically, it’s been said that the airline industry, in its entire history, has never made any money. I don’t have the data… Read More

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6 May 2015

Celebrating Short-Sellers

Just 13 trading sessions ago on April 17th, the yield on the German 10-year government bond, or bund, fell to less than 0.05 percent. Given that a third of all non-US bonds issued worldwide had a negative yield, the question wasn’t whether the yield on bunds would go lower, but how far into negative territory they would go.  Unfortunately, I didn’t have the right tools to make a chart, so I’ve… Read More

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