“Today the market dropped 1% and while the standard ETF is down 1% (as I would expect), the covered call ETF is more or less flat. How is that possible? Isn’t the ETF long the same stocks?”

Great question. I think it’s important to understand how Covered Call ETF’s work in order to understand this. For example, if you owned for 100$ worth of stock, here is what it looks like:

Standard ETF: You own $100 worth of shares
Covered Call ETF: You own $100 worth of stock and have sold call options on those stocks. Let’s imagine that the value of those calls is $7. You would also have $7 worth of cash from those sold options ($100-$7+$7)

In both cases, a drop of 1% will result in a loss of more or less $1 in the value of the stocks. However, depending on the time left to expiry, movements in volatility and other factors, the value of the options sold might diminish by close to $1. In such a situation, the Covered Call ETF would in fact be flat!

You would now own $99 in stocks, $6 of sold options and $7 in cash ($99-$6+$7).

Typically, the options will not offset the entire movement from the stocks but in almost all cases, it will diminish the impact. Why? Call Options move in the same direction as stocks all other things being equal so when stocks go up, the options will as well. Since you sold them, it will take away gains from your stock.

Is Less Volatility A Good Thing?

Generally, since investors are risk averse, having more stability is seen as a good thing. However, it will always depend on the actual return of the Covered Call Strategy. In the end, it really depends on each investor but if getting additional income and less volatility in your portfolio is something that interests you, Covered Call ETF’s might be just what you are looking for.

There are several people who think hedging against (potential) upcoming inflation is the best investment to do. Investors fears another inflationary period as we lived during the 80′s.  If it’s the case, buying gold (through gold ETF?) maybe a great solution.

The question now is, what’s going to happen to gold after it hit our first target level?

The main trend continues to be positive and I believe that any pullback in this market should be met with good support. It is possible that we could see a pullback of $20-$25 which would not change the overall positive trend of the market which we see continuing until the end of the year.

As readers of this blog know, we have an upside target zone of $1,250-$1,300 an ounce for gold (I bet the president of Barrick Gold thought the same way when Barrick issued for billions of debts in order to buy back previous gold contract at $900 an ounce). While that target zone is still in place, we believe that the huge “energy field” that we’ve discussed in our earlier gold videos is capable of pushing this market higher.

In this new video I explain some of the areas that I’m looking at and also some of the places where you can place tight stops to lock in profits.

As always the videos are free to watch and there is no need to register. I would love to hear your views on gold in our Trader’s Blog comment section.

If you are looking to trade Gold, I suggest you look at the list of the Best ETF Gold.

Looking for the best money market fund yield? The best CD rate in Texas? Or are you looking for the best savings bank account yield in history? I have found a great site for you: Select CD Rates.

What is Select CD Rates?

This is the perfect place to put your money when you want to sleep in peace. The best CD rate in Texas can be found on this site along with the best CD rates for 19 other States! You will also be able to shop comfortably for a bank savings account or money market funds. This is definitely a must when looking for safe investments.

What makes you want to visit this site?

As I said before, Select CD Rates offers a lot of financial information. Besides the “CD shopping info center” you can also find the latest economic statistics along with the Fed rate history. If you enjoy predicting trends, you can surely figure out if rates are on the rise or should stay sable for a few more months.

Are the resources really helpful?

The most interesting point of this site is that the CD RATES INFORMATION IS FREE! In plain English, you don’t have to register, give up your email address or pay to get the scoop. In the comfort of your own home, you are able to find what you need.

It is not only free but it also provides relevant and accurate information. I wish there were more sites like this one!

Can improvements be made?

I really like the design as it is pretty clean and you can get the information you are seeking fast enough. I would maybe suggest some negotiating tactics since the featured CD rate can vary from what you can readily obtain at your local bank. If you are serious about maximizng your investments, chances are you can get a few more points!

Disclaimer: This was an honest but paid review. We did it because we think it is a great financial resource on the Web and our opinion has not been biased. We are now offering to review your website for a highly competitive price. If you wish Buy My Stock Picks to review your website, please feel free to contact us at thefinancialblogger (at) gmail (dot) com or visit our advertising section.

etf gold

Last week, I have written about the best ETF Gold on the stock market. I actually think that gold could be part of the best stock to purchase in 2009. However, even though the US dollar is plunging, and investors fear inflation, gold is not skyrocketing…yet! Hence, many people are questioning why gold prices haven’t gone higher – much higher.

I found a new video, explaining some of the subtle market cycles that are at play right now in this market. These short-term cycles have been the dominant force in gold all year and appear to be still in control of price action. This is why we look at gold ETF not moving up as we were in a roller coaster.

According to the price of gold technical analysis, I believe the longer-term upward trend in gold is very much intact; short-term we could see more of a trading range that has a downward bias. I think when you watch this video you will get a much better understanding about the rhythm of this market.

If I am correct, you will see some amazing opportunities that I believe will be presented to traders in Q4. In fact, if everything goes according to plan are we could all be looking at some very nice Christmas/holiday profits. The short term cycles will end sooner or later and then, the real  price of gold will show up… at more than $1000 per ounce

Along with the technical analysis, all fundamentals push the price of gold to higher peaks:

- The fear for inflation

- The (bottomless) drop of the US dollar

- The fact that China is heavily purchasing gold as a substitute to the US dollar

- The fact that there is more and more demand for gold while gold mining industry is not able to find new and promising gold mines.

The video is easy to follow and I think you’ll learn a whole lot about cyclic price action in the gold market.

We do not require you to register to view this video. It is totally free and could really help you out understanding what is going on with gold and why you should consider investing in Gold ETF.

This was another great week for stocks in 2009. Those who made great stock picks should be smiling by now!

The Fibonacci tool fully explained in this video

(Fibonacci… it’s a technical tool that can make you rich)

The Financial Blogger presents 3 Reasons Why You Should Not Do Market Timing.

China ETFs at The Sun’s Financial Diary

How to Build a Simple and Effective All-ETF Portfolio at ETFdb

Asset Allocation – Investing By The Numbers at Australian Stock Market Blo

Just Buy Index Funds Directly at Stock Index Mutual Fund

Most Individual Investors Are Poor Personal Portfolio Managers at Personal Investment Managemen

How to Profit from Employee Stock Options Regardless of Share Performance at Darwin’s Finance

D4L presents Low-Debt Dividend Stocks posted at Dividends Value.

Carnivals:

Carnival of Personal Finance

Zachary Scheidt presents Syniverse (SVR) – Recovering, Beating Expectations.

D4L presents Genuine Parts Co. (GPC) Stock Analysis.

Silicon Valley Blogger presents 1929 Stock Market Cycle: Are Technical Indicators, Stock Trends Repeating History?

Ian Welsh presents How to Understand the March 23 Market Rally.

Should You Own Individual Stocks? posted at Moolanomy.

Realized and Unrealized Gains and Losses posted at Investing School.

Carnivals:

Carnival of Personal Finance

So what’s ahead for the new black gold? After seeing this market move to its best levels in some time, we have seen a sharp pullback from the recent highs as the crude oil market appears to be mimicking the equity markets. On the other side, crude oil surged today (April 2nd) to $52.64 on the hype of the market.

In this new video you will see in detail as to what the technicals are showing for this market. I think you’ll find the analysis interesting, revealing and above all educational.

click here to see the video

As always, the video is with our compliments and there is no registration requirements.

Enjoy the video!

Every Saturday, the team of Buy My Stock Picks does a review of good read around the blogosphere. Here’s what caught our attention this week:

But First, we must say that we had quite a success with our latest two post about the best stock picks for 2009 and the best stock picks for 2009 part 2.

Two trending markets revisited and analyzed for you

Last week I watched a video analysis of the S&P and Crude Oil markets. The technical analysis was right on at the time, but those markets have changed quite a bit in the last few days. The S&P had a huge rally and Crude seemed to steady out, so what’s the new analysis? Glad you asked!

Below are two free videos, one on Crude Oil and one on the S&P, that gives us an in depth technical look into these markets. Again the videos are free and very informative.

S&P Video Analysis

Crude Oil Projections

Being Frugal has a post on asset allocation for beginners.

Richer by the Day explains how not to sell gold.

The Dividend Guy explains the tyranny of investment fees.

The Financial Blogger explains how to start investing.

Intelligent Speculator thinks that Google should feel threatened by Twitter and Facebook.

Investo Blog explains stock options trading.

Dividends4Life presents Wal-Mart Stores, Inc. (WMT) Stock Analysis

Carnivals:

Carnival of Personal Finance

image source: peakoil.net

Every Saturday, the team of Buy My Stock Picks does a review of good read around the blogosphere. Here’s what caught my attention this week:

Dividend Growth Investor presents Merck/Schering-Plough Merger Arbitrage Opportunity

Ramis presents Dollar Cost Averaging posted at Financial Highway

The Smarter Wallet presents Investing In The Stock Market? Rules To Help You Sleep At Night

MoneyNing presents Zecco vs TradeKing – Online Stock Trading Comparison

Silicon Valley Blogger presents Find Investment Opportunities In Any Business Market Environment! Ride The Economic Recovery

Carnivals:

Festival of Stocks (Editor’s Pick! Yeah!)

image source: ACC TV