Exchange-traded funds (“ETFs”) provide an easy way for investors to gain access to nearly any country or asset class. In addition to providing diversified exposure in a single U.S.-traded security, ETFs are equities themselves that may have options available to trade. These options open up the door for investors to create additional highly targeted strategies [see also ETF Call And Put Options Explained]. In this article, we’ll look at the neutral calendar spread strategy and explore how ETF investors can use it to capitalize on sideways trading. What Is a Neutral Calendar Spread Strategy? Suppose an investor owns a commodity ETF that he or she uses to diversify an otherwise equity-heavy portfolio. Since the ETF is being used as a hedge, the investor may not be particularly bullish on the commodity ETF’s prospects. In this case, the investor could employ a neutral calendar spread in order to generate income from this sideways trading. [...] Click here to read the original article on ETFdb.com. Related Posts: 7 Articles ETF Investors Must Read: 4/18 Gold Hitting Two-Year Lows: Are Glory Days Done? Daily ETF Roundup: Stocks Rebound From Worst One-Day Drop In 2013 Daily ETF Roundup: Dow Tumbles, Posting Worst One-Day Drop In 2013 ETF Insider: Buy On The Dip With Caution
Exchange-traded funds (“ETFs”) provide an easy way for investors to gain access to nearly any country or asset class. In addition to providing diversified exposure in a single U.S.-traded security, ETFs are equities themselves that may have options available to trade. These options open up the door for investors to create additional highly targeted strategies [see also ETF Call And Put Options Explained]. In this article, we’ll look at the neutral calendar spread strategy and explore how ETF investors can use it to capitalize on sideways trading. What Is a Neutral Calendar Spread Strategy? Suppose an investor owns a commodity ETF that he or she uses to diversify an otherwise equity-heavy portfolio. Since the ETF is being used as a hedge, the investor may not be particularly bullish on the commodity ETF’s prospects. In this case, the investor could employ a neutral calendar spread in order to generate income from this sideways trading. [...]
Click here to read the original article on ETFdb.com.
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