Schwab just released a bunch of ETFs and they’re competitive on fees… and if you have a Schwab account, you can trade them with zero commissions.

Click on the picture for more detail on specific ticker sectors, fees, and comparable ETFs.

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More info here.

Yay competition!

Oops, the game isn’t “where’s waldo”, but rather “where’s volume?”

While commentators are clamoring that either the green shoots are taking root, or the world is about to end again… based on the relatively low trading volumes, nothing in the current market should be trusted as a means of price discovery or a measure of long-term trend.

Take the Dow 30 as an example… the last 6 trading days have had less than 1 billion shares trade. Back in March and April, it was typically between 2b and 3b shares trading.

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Of course, you do get some funny behavior when some of the index’s components were trading under $10, so number of shares necessarily increases to trade the same monetary value… and you can see most of 2007 was trading under 1b shares daily… but times are different, and it is that part of the year where the markets can be batted around with lower than typical volume.

We should see volume return in September or October… but only time will tell when the markets will see price movements on big volume that will give us the higher level of confidence that the market is actually acting like a market — seeking out the correct price level. When that time comes, remember that efficiency is a process, not a constant state of the markets.

Ok, people, if this?thing is going to happen, that obviously sets us up for a certain future, depending on your views. So, if you had $100,000 to invest in the aftermath of a bill passing and you had total flexibility (within reason, e.g. stocks, options, futures, metals, Treasuries, FX), do you have a bead on an optimal “Living-with-the-Bailout” portfolio/asset allocation plan? I’m stumped right now (or rather more concerned with stopping the bill that dealing with the aftereffects) but wondered if any of you smart dudes had one in the works. And I obviously know that you all will be concentrating on things like debt reduction etc. but I’m interested more in your ideas for profiting from this even if you don’t plan to actually pursue that route. I’d also like to see how the plan ties into your outlook for various markets.

The equity markets right now are extremely volatile. The VIX has more than doubled just in the past few months, and this presents some opportunity if you’re willing to buy during the dips. Before I go further, let me be clear that I’m only considering buying broad market indexes when buying dips – not individual stocks or niche ETFs or mutual funds. I feel buying into dips is only advisable when considering a broad basket of equities. So, to simplify the discussion below, assume that we’re talking about the S&P500 only (although this should apply to any index funds, ETFs and mutual funds that focus on a large basket of equities) and that we’re discussing using market dips to augment long-term holdings only.

The 3-part question I’ve been grappling with is: (1) what constitutes an actionable dip, (2) when to exploit this dip, and (3) how much to invest in the dip. Volatility helps create really nice dip opportunities, but it requires some speed, available funds, and some previously determined strategy to effectively capitalize on volatility. (more…)

I heard a piece on Market Place (with both audio and transcript) over the weekend about investing in Cuba via the Herzfeld fund. It’s a closed end fund, trading at a much higher premium to NAV than I’m comfortable with (nearly 40%), but it does have a tantalizing investment strategy, and the fund is up 50% so far this year. Herzfeld focuses on businesses in the US that are poised to profit when US/Cuba relations are restored. Here’s a great quote from the piece that highlights this principle: (more…)

Interactive Brokers announced today that they would offer options priced to the penny: Penny Priced Options. IB is well ahead of the other brokers and exchanges on this one, so there are some interesting footnotes to be aware of, but nothing to scare me away.

Before this announcement, the smallest increments for options was $0.05, so it should be interesting to see how the spread collapses (or doesn’t collapse) on the most heavily traded options, like the options on the QQQQs and the popular day-trading stocks.

Since the bulk of my investments are in index funds, fed regularly by scheduled payments based on a pre-set asset allocation, it probably sounds strange when I express concern about taking profits and shifting my asset allocations. Obviously, rebalancing is essential to maintain appropriate asset allocations according to my plans, but a little over a month ago I performed an action that seemed to fall outside my asset allocation strategy. Jason has requested that I explain and expound upon my actions. (more…)

The subject of stop-losses is such an intensely difficult topic to discuss.? I’ve had many latenight debates in trading forums and chatrooms and I’ve been through every camp in my experience as a trader.? The best answer I’ve ever been able to come up with is that answer famous and frustrating for its truth: it depends. (more…)

No, not the blog (or rather the blog of other blogs).? I mean specifically the alpha that they are seeking.? What is it? (more…)

Of?all techniques used to analyze markets, the one that I find underappreciated is market profiling and auction market value theory.? This style was first codified?by CBOT as Market Profile.? But the basic principal is finding areas of price that generate more ticks of trading than others.? I’ve talked of this before as “density” areas. (more…)

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