How much must you have in a bear ETF to trade on a weakly basis and make money?
so there are extra costs to the broker transaction costs???? how is this money taken from your broker acount??? AM i missing somthing important can ETFs not be traded often like stocks?
Filed under Tips by on May 22nd, 2010. Comment. 
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Comments on How much must you have in a bear ETF to trade on a weakly basis and make money?
There’s not really a good answer to that. If you find a decent trading strategy look at what an average trade returns (these should vary with the size of the trade) and compare that to the trading costs (these are typically fixed). Or you could just back test with fees and see what it looks like.
Yes, all brokers charge a commission to trade, this ranges from a low of $4 at sharebuilder (not really conducive to any trading strategy), to higher amounts at full service brokerages (you’re paying for research). In addition to this, the price you buy at is always higher than the price you sell at (the bid ask spread). These are tight for most ETFs but shouldn’t be ignored.
The commission is added to your purchase amount and removed from your trade proceeds. So if the commission is $10 (a nice round discount broker number) and you buy 100 shares at $25/share you’ll pay 2510 and if you sell them at $25.25 you’ll only recieve $2515. When you’re buying the sell price would be $24.99 or something below that and when you’re selling the buy price would be $25.26 or something above that.
They can be traded just like stocks. If you’re concerned about the trading fees, you can get a cheap index fund that doesn’t have transaction fees (but usually won’t let you trade in and out frequently). They’re a decent place to build your capital though.