ETFs, Exchange Traded Funds, are one of the most popular investment instruments in the world. They allow traders to invest in many companies with even small initial capital. Let’s see how it works.
What are Exchange Traded Funds?
Every trader wants to earn money. The base is to buy shares of some prosperous companies. But what happens if the firm goes bankrupt? You lose your funds.
To avoid such a situation you may invest in stocks of a few different companies. Your money is split between them and even if one loses, you still earn profits from the others. The problem is that your attention must be also divided between many different markets. You should constantly look for new possibilities and follow the situation in the markets where you have already invested capital. You must then be active and take fast decisions on whether to buy or sell a particular share. Another thing is that many stocks nowadays are quite expensive to buy. If you want to have a bigger profit you must own more than one share. Plus commissions. This requires massive capital to start with.
ETFs can help you diversify a securities portfolio with a smaller initial input. Buying an ETF mean that you obtain part of a specific set of stocks. Moreover, a single ETF costs a relatively small amount of money.
Trading ETFs at Olymp Trade
There are no minimum investment requirements when purchasing ETFs. You can buy even a single share. It is easy to buy and sell ETFs.
There are 4 different ETFs you may buy with Olymp Trade. ETF MSCI Brazil, ETF S&P 500, ETF NASDAQ and ETF U.S. Real Estate.
ETF MSCI Brazil
This Exchange Traded Fund includes some stocks of economic companies in Brasil such as IT companies, oil companies, major banks and food producers.
It is defined by double volatility.
ETF S&P 500
The base for this ETF is fear of the S&P 500 index decline. The investors are using particular assets to preserve their investments and the ETF S&P 500 tracks the dynamic of these assets.
This fund is characterized by 1,5 volatility. This quote may rise in case the US stock market weakens.
ETF NASDAQ consists of stocks of some leading IT companies in the USA. You will find IBM, Apple or Facebook among them.
The quote of this ETF rises together with the stocks index decline, accelerated 2 times.
ETF U.S. Real Estate
It is based on stocks of the companies connected to the US real estate sector that is the firms that deal in sales and rentals of commercial properties, hotels or industrial buildings in addition to other activities. There are over 110 organizations that are included in the fund so the security of the investment is relatively high.
Buying ETFs is a simple process. It allows you to invest in securities and purchase the whole market with minimum costs. With ETFs, you may invest in stocks of companies all over the world.
Remember there is a free demo account on the Olymp Trade platform. Go there and check different types of Exchange Traded Funds without risking your own money. Once you learn how to trade them you can move to the live account to earn some profit.
Use the comments section you will find further down the site to add any comment you have on the ETFs. Have you ever traded them? Which ones are your favourite? Do you find it easy? I would be happy to hear from you!
Best of luck!
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