Although ETFs may sound exotic, they are relatively simple to trade and understand. In short, you can view them as a stock - albeit ones available with useful options, such as built-in leverage and negative correlation. If you need to know more, here are the basics: 1. Registered under the Investment Company Act of 1940, ETFs are technically investment companies. The actual ETFs sell and redeem shares in large blocks to brokerage houses or institutional investors. Those intermediaries in turn list those shares on the secondary market where individual traders can buy and sell them.rn2. Each ETF has a unique ticker symbol, just like a stock. In most cases, you trade them just like you would an individual equity in your trading account. Symbols are listed in "Futures 2009 ETF Guide" on page 52. 3. Beyond the transaction costs of commission and slippage, each ETF also has an expense ratio. This is the percentage of fund assets the fund manager may withdraw each year to pay for operating expenses.
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