If I remember correct, they also trade "intra-day" meaning the price fluctuates via bid / ask vs. Mutual Funds closing @ a NAV @ the end of the day. Also If I remember correct you can put a "Stop Loss Order" on them as a way to prevent losses on the way down. So imagine in Sept 08' you were sitting on some gains and decided on a Stop Loss, you might have gotten out @ your sell price before the bottom fell out.
But note that "stop loss orders" become market orders when triggered and that means, of course, not that they will be liquidated/executed at the trigger price, but they will be executed at market. In a falling market, a large group of market sell orders can drive a market in deep loss territory...and you don't want to sell there.
It has been said that this was the reason for the great depth of the crash of 2008. A lot of trading programs (computer algorithms) had "stop loss orders" which when triggered caused the entire market to race to the bottom in an effort to trade out.
” Also If I remember correct you can put a “Stop Loss Order” on them as a way to prevent losses on the way down. So imagine in Sept 08’ you were sitting on some gains and decided on a Stop Loss, you might have gotten out @ your sell price before the bottom fell out. “
You can get killed on a stop-loss order. Suppose you had a stock trading at 50 with a SL at 45.
On a rumor it opens the next day at 20. Your SL sells it at 20.
Rumor is falsified and stock returns to 50. You are out 30 points.
I stay with what I understand. Equities.
That is a good idea to see which ETF's have a stock you're interested in. Same with mutual funds.