How to Make Money with ETF Funds

Are you interested in trading on the stock market but aren't sure that you want to invest in individual companies? Or perhaps you want to trade in oil or other commodities. Maybe you want to bet that the dollar will go up or down. You can do all of this sort of trading with etf funds.

To make money with ETF funds, you first must know what an ETF fund is.

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"ETF" stand for "Exchange Traded Fund". What that means, is that the ETF is a fund traded on a stock exchange. It is not a share of a company like a stock, but is instead an investment instrument.

Making money with ETF funds can be more interesting than trading stocks because they give ample room for market analysis without worrying about the performance of an individual company. With ETF funds, you can make money by betting on the dollar or on the Dow Jones Index or by betting that agricultural commodities will go up. It's all up to you and your analysis of market trends.

You make money with ETF funds by simply buying low and selling high. You can also short-sell a fund in many cases by selling high and then buying low.

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ETF funds also sometimes allow for added leverage. For example, Direxion Funds will let you bet on market moves with 2.5x to 3x leverage. If you use that in combination with margin trading, you have serious leverage! However, keep in mind that this is EXTREMELY risky and you can get wiped out quickly.

Another thing to consider is that, depending on your jurisdiction, it is possible that tax treatment of ETF funds will be different than for stocks. So if you plan on making money with ETF funds, check first with your accountant.

Now that you know a bit about ETF funds, visit the Master Data list of ETFs.

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