The Option Profit

Exchange Traded Funds trade like an individual equity, but are groups of equities or instruments that track indexes, market sectors, foreign markets, commodities, volatility, inverse market directions, as well as, a broad range of domestic, foreign and fixed income market investments. Unlike a managed mutual fund, all positions held inside an ETF are disclosed daily. Unlike a UIT, positions inside an ETF can be changed upon the issuers discretion, such as, in the event of a market rebalancing. ETF’s trade in the open market and unlike mutual funds or UIT’s, carry no sales load or minimum investment and generally, have lower operating expenses. An ETF’s price fluctuates trade by trade just as an individual equities price does. An investor can short sell an ETF and, in many cases, trade options against them.

The Option Profit will frequently utilize ETF’s, with the intention of reducing trading risk, by gaining exposure to multiple securities, in lieu of, individual equities. Although no investment is free of risk, the ability to spread risk over a sector or index can greatly reduce the potential downside that accompanies exposure to individual securities. We purposely avoid mentioning any individual ETF issuer. There are, however, many families of ETF’s that offer very beneficial products which can be incorporated into almost any portfolio. Listed below is a small sample of the many ETF’s The Option Profit may incorporate into our many trading strategies.

INDICES:

DIA     - DOW 30
DDM    - Ultra DOW 30
DOG    - Short DOW 30
DXD    - Ultra Short DOW 30
SPY    - S&P 500
SSO    - Ultra S&P 500
SH    - Short S&P 500
SDS    - Ultra Short S&P 500
QQQ    - NASDAQ 100
QLD     - Ultra NASDAQ 100
PSQ     - Short NASDAQ 100
QID    - Ultra Short NASDAQ 100
MDI    - MIDCAP 400
MVV    - Ultra MIDCAP 400
MYY    - Short MIDCAP 400
MZZ    - Ultra Short MIDCAP 400
IWM    - RUSSELL 2000
UWM    - Ultra RUSSELL 2000
RWM    - Short RUSSELL 2000
TWM    - Ultra Short RUSSELL 2000
EEM    - MSCI Emerging markets
EET    - Ultra MSCI Emerging Markets
EUM    - Short MSCI Emerging Markets
EEV    - Ultra Short MSCI Emerging Market
EFA    - MSCI EAFE Index
EFO    - Ultra MSCI EAFE Index
EFZ    - Short MSCI EAFE Index
EFU    - Ultra Short MSCI EAFE Index
FXI    - FTSE / Xinhau China 25
XPP    - Ultra FTSE / Xinhau China 25
FXP    - Ultra Short FTSE / Xinhau 25
EWJ    - MSCI Japan Index
EZJ    - Ultra MSCI Japan
EWV    - Ultra Short Japan
EWZ    - MSCI BRAZIL Index
BZQ    - Ultra Short MSCI BRAZIL
EWW    - MSCI MEXICO Investable Index
SMK    - Ultra Short MSCI MEXICO Investable Index
EWH    - MSCI HONG KONG Index
PGJ    - Golden Dragon CHINA
AIA    - ASIA 50 Index
EPP    - MSCI PACIFIC ex-JAPAN
EWY    - MSCI S. KOREA Index
EWT    - MSCS TAIWAN Index
EZA    - MSCI S. AFRICA Index
EWC    - MSCI CANADA
EWD    - MSCI SWEDEN
IEV    - S&P EUROPE 350 Index
EWG    - MSCI GERMANY
EWP    - MSCI SPAIN
EWQ    - MSCI FRANCE
EWO    - MSCI AUSTRIA
EWL    - MSCI SWITZERLAND
EWI    - MSCI ITALY
EWN    - MSCI NETHERLANDS
EWU    - MSCI UNITED KINGDON
EWK    - BELGIUM
BKF    - MSCI BRIC Index
ILF    - S&P LATIN AMERICA 40Index
EWA    - MSCI AUSTRALIA
IOO    - GLOBAL 100 Index

ACWI = MSCI ALL COUNTRY WORLD INDEX

Refer to Glossary for terms and definitions

Option Profit members can elect to have trade ideas sent to them via secure email notification and have unlimited access to the features of their respective memberships. All Option Profit Trade Ideas:

Are sent in a timely manner
Include strike prices and symbols
Have estimated returns assuming expiration of the trade

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RISK is inherent in any investment. No individual or entity should invest with funds they cannot afford to lose. Option trading is time sensitive and involves risk including, but not limited to, loss of gains and principal. A leveraged investor risks the loss of more than principal. Options do not have to be held until expiration and can be exercised at any point. Option trades can be closed prior to expiration with a gain or loss being realized. It is important that you understand all trades and the risk associated before executing a transaction. The Option Profit provides broad ideas, not individual recommendations, and is not responsible for any losses incurred. Diversification is important with any strategy and should be considered when investing Before trading consult with a financial advisor to determine if option trading is appropriate for you and your financial goals.