SlideShare a Scribd company logo
Futures Trading and ETFs: How to use ETFs in
your futures trading strategy
Futures Trading and ETFs:
Futures trading and exchange-traded funds (ETFs) are two popular
investment vehicles that can be used in conjunction to create a well-rounded
trading strategy. By understanding the benefits and drawbacks of each,
traders can make informed decisions on how to use ETFs in their futures
trading strategy.
Futures trading is a form of derivatives trading where a trader enters into a
contract to buy or sell an underlying asset at a predetermined price and date
in the future. This allows traders to take advantage of price movements and
hedging opportunities in various markets, including commodities, currencies,
and stock indexes.
ETFs, on the other hand, are investment funds that track the performance of
a specific group of assets, such as a stock index or a commodity. ETFs can be
bought and sold just like stocks on an exchange, making them a convenient
and liquid investment option.
One of the main advantages of using ETFs in a futures trading strategy is the
ability to diversify. By investing in an ETF that tracks a specific market or
sector, traders can gain exposure to a wide range of assets without having to
trade each individual stock or commodity. This can help to spread risk and
reduce volatility in a portfolio.
Another advantage is the ability to use ETFs for passive investing. ETFs can
be a good option for traders who want to take a long-term approach and build
a portfolio of diversified assets. By buying and holding ETFs, traders can
potentially benefit from the underlying assets' long-term performance without
the need for constant monitoring and adjustments.
On the other hand, futures trading is more suitable for short-term and active
traders. With futures trading, traders can take advantage of short-term
market movements and profit from price changes in a specific market or
sector. This requires more frequent monitoring and adjustments to a trading
strategy.
When using ETFs in a futures trading strategy, it is important to keep in mind
that ETFs typically have lower liquidity than futures contracts. This can make
it more difficult to enter or exit a position quickly, and may result in wider
bid-ask spreads. Additionally, ETFs may have higher expense ratios than
futures contracts, which can eat into returns over time.
In conclusion, ETFs and futures trading can complement each other in a well-
rounded trading strategy. By understanding the benefits and drawbacks of
each, traders can make informed decisions on how to use ETFs in their
futures trading strategy to diversify and spread risk while taking advantage of
short-term market movements. It is important to keep in mind the liquidity
and expense ratios when making these decisions.

More Related Content

Similar to How to use ETFs in your futures trading strategy.pdf

Forex Trading Strategies: Best Guide 2022
Forex Trading Strategies: Best Guide 2022Forex Trading Strategies: Best Guide 2022
Forex Trading Strategies: Best Guide 2022
MatthiasKuerpick
 
ACTIVE AND PASSIVE STRATIGIES OF INVESTMENT
ACTIVE AND PASSIVE STRATIGIES OF INVESTMENTACTIVE AND PASSIVE STRATIGIES OF INVESTMENT
ACTIVE AND PASSIVE STRATIGIES OF INVESTMENT
Sami Swati
 
How to use ETFs in portfolio construction ftadviser
How to use ETFs in portfolio construction   ftadviserHow to use ETFs in portfolio construction   ftadviser
How to use ETFs in portfolio construction ftadviser
Luis Rivera
 
FOREX FUNDAMENTALS: A BEGINNER'S GUIDE.pdf
FOREX FUNDAMENTALS: A BEGINNER'S GUIDE.pdfFOREX FUNDAMENTALS: A BEGINNER'S GUIDE.pdf
FOREX FUNDAMENTALS: A BEGINNER'S GUIDE.pdf
Cocity Enterprises
 
Fxreviewtrading.com simple forex strategy
Fxreviewtrading.com simple forex strategyFxreviewtrading.com simple forex strategy
Fxreviewtrading.com simple forex strategy
Alexanderjames49
 
Fxreviewtrading.com simple forex strategy
Fxreviewtrading.com simple forex strategyFxreviewtrading.com simple forex strategy
Fxreviewtrading.com simple forex strategy
Alexanderjames49
 
Forex trading strategies
Forex trading strategiesForex trading strategies
Forex trading strategies
IFC Markets Corp.
 
Morningstar ETF
Morningstar ETFMorningstar ETF
Morningstar ETF
sarakr00
 
Mid Term Note (MTN) Strategies
Mid Term Note (MTN) StrategiesMid Term Note (MTN) Strategies
Mid Term Note (MTN) Strategies
hansongroupus
 
Exchange Traded Funds (ETFs)
 Exchange Traded Funds (ETFs) Exchange Traded Funds (ETFs)
Exchange Traded Funds (ETFs)
mahadeva prasad
 
Masterclass on Exchange Traded Funds (ETFs)
Masterclass on Exchange Traded Funds (ETFs)Masterclass on Exchange Traded Funds (ETFs)
Masterclass on Exchange Traded Funds (ETFs)
Deborah Benn
 
Morningstar etf
Morningstar etfMorningstar etf
Morningstar etf
sarakr00
 
Sampatti etf simplified
Sampatti etf simplifiedSampatti etf simplified
Sampatti etf simplified
Mumbai Ngo
 
Beginner's Guide to Forex Trading
Beginner's Guide to Forex TradingBeginner's Guide to Forex Trading
Beginner's Guide to Forex Trading
Earn MoneyOnlineEasy
 
Does the ETF Industry alter the Volatility of the Underlying Securities? The ...
Does the ETF Industry alter the Volatility of the Underlying Securities? The ...Does the ETF Industry alter the Volatility of the Underlying Securities? The ...
Does the ETF Industry alter the Volatility of the Underlying Securities? The ...
Andrea Bullani
 
Mutual Funds or Stock Investments Best 5 Facts for Wise Investments.pdf
Mutual Funds or Stock Investments Best 5 Facts for Wise Investments.pdfMutual Funds or Stock Investments Best 5 Facts for Wise Investments.pdf
Mutual Funds or Stock Investments Best 5 Facts for Wise Investments.pdf
Nazim Khan
 
Exchange Traded Funds
Exchange Traded FundsExchange Traded Funds
Exchange Traded Funds
KSCFPC
 
Options Stock Indices, Currency, and Futures
Options Stock Indices, Currency, and FuturesOptions Stock Indices, Currency, and Futures
Options Stock Indices, Currency, and Futures
Karan Choudhury
 
Etf
EtfEtf
Forex trading strategy
Forex trading strategyForex trading strategy
Forex trading strategy
ChristineNelson17
 

Similar to How to use ETFs in your futures trading strategy.pdf (20)

Forex Trading Strategies: Best Guide 2022
Forex Trading Strategies: Best Guide 2022Forex Trading Strategies: Best Guide 2022
Forex Trading Strategies: Best Guide 2022
 
ACTIVE AND PASSIVE STRATIGIES OF INVESTMENT
ACTIVE AND PASSIVE STRATIGIES OF INVESTMENTACTIVE AND PASSIVE STRATIGIES OF INVESTMENT
ACTIVE AND PASSIVE STRATIGIES OF INVESTMENT
 
How to use ETFs in portfolio construction ftadviser
How to use ETFs in portfolio construction   ftadviserHow to use ETFs in portfolio construction   ftadviser
How to use ETFs in portfolio construction ftadviser
 
FOREX FUNDAMENTALS: A BEGINNER'S GUIDE.pdf
FOREX FUNDAMENTALS: A BEGINNER'S GUIDE.pdfFOREX FUNDAMENTALS: A BEGINNER'S GUIDE.pdf
FOREX FUNDAMENTALS: A BEGINNER'S GUIDE.pdf
 
Fxreviewtrading.com simple forex strategy
Fxreviewtrading.com simple forex strategyFxreviewtrading.com simple forex strategy
Fxreviewtrading.com simple forex strategy
 
Fxreviewtrading.com simple forex strategy
Fxreviewtrading.com simple forex strategyFxreviewtrading.com simple forex strategy
Fxreviewtrading.com simple forex strategy
 
Forex trading strategies
Forex trading strategiesForex trading strategies
Forex trading strategies
 
Morningstar ETF
Morningstar ETFMorningstar ETF
Morningstar ETF
 
Mid Term Note (MTN) Strategies
Mid Term Note (MTN) StrategiesMid Term Note (MTN) Strategies
Mid Term Note (MTN) Strategies
 
Exchange Traded Funds (ETFs)
 Exchange Traded Funds (ETFs) Exchange Traded Funds (ETFs)
Exchange Traded Funds (ETFs)
 
Masterclass on Exchange Traded Funds (ETFs)
Masterclass on Exchange Traded Funds (ETFs)Masterclass on Exchange Traded Funds (ETFs)
Masterclass on Exchange Traded Funds (ETFs)
 
Morningstar etf
Morningstar etfMorningstar etf
Morningstar etf
 
Sampatti etf simplified
Sampatti etf simplifiedSampatti etf simplified
Sampatti etf simplified
 
Beginner's Guide to Forex Trading
Beginner's Guide to Forex TradingBeginner's Guide to Forex Trading
Beginner's Guide to Forex Trading
 
Does the ETF Industry alter the Volatility of the Underlying Securities? The ...
Does the ETF Industry alter the Volatility of the Underlying Securities? The ...Does the ETF Industry alter the Volatility of the Underlying Securities? The ...
Does the ETF Industry alter the Volatility of the Underlying Securities? The ...
 
Mutual Funds or Stock Investments Best 5 Facts for Wise Investments.pdf
Mutual Funds or Stock Investments Best 5 Facts for Wise Investments.pdfMutual Funds or Stock Investments Best 5 Facts for Wise Investments.pdf
Mutual Funds or Stock Investments Best 5 Facts for Wise Investments.pdf
 
Exchange Traded Funds
Exchange Traded FundsExchange Traded Funds
Exchange Traded Funds
 
Options Stock Indices, Currency, and Futures
Options Stock Indices, Currency, and FuturesOptions Stock Indices, Currency, and Futures
Options Stock Indices, Currency, and Futures
 
Etf
EtfEtf
Etf
 
Forex trading strategy
Forex trading strategyForex trading strategy
Forex trading strategy
 

Recently uploaded

PCOS corelations and management through Ayurveda.
PCOS corelations and management through Ayurveda.PCOS corelations and management through Ayurveda.
PCOS corelations and management through Ayurveda.
Dr. Shivangi Singh Parihar
 
বাংলাদেশ অর্থনৈতিক সমীক্ষা (Economic Review) ২০২৪ UJS App.pdf
বাংলাদেশ অর্থনৈতিক সমীক্ষা (Economic Review) ২০২৪ UJS App.pdfবাংলাদেশ অর্থনৈতিক সমীক্ষা (Economic Review) ২০২৪ UJS App.pdf
বাংলাদেশ অর্থনৈতিক সমীক্ষা (Economic Review) ২০২৪ UJS App.pdf
eBook.com.bd (প্রয়োজনীয় বাংলা বই)
 
Types of Herbal Cosmetics its standardization.
Types of Herbal Cosmetics its standardization.Types of Herbal Cosmetics its standardization.
Types of Herbal Cosmetics its standardization.
Ashokrao Mane college of Pharmacy Peth-Vadgaon
 
PIMS Job Advertisement 2024.pdf Islamabad
PIMS Job Advertisement 2024.pdf IslamabadPIMS Job Advertisement 2024.pdf Islamabad
PIMS Job Advertisement 2024.pdf Islamabad
AyyanKhan40
 
BÀI TẬP BỔ TRỢ TIẾNG ANH 8 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2023-2024 (CÓ FI...
BÀI TẬP BỔ TRỢ TIẾNG ANH 8 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2023-2024 (CÓ FI...BÀI TẬP BỔ TRỢ TIẾNG ANH 8 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2023-2024 (CÓ FI...
BÀI TẬP BỔ TRỢ TIẾNG ANH 8 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2023-2024 (CÓ FI...
Nguyen Thanh Tu Collection
 
South African Journal of Science: Writing with integrity workshop (2024)
South African Journal of Science: Writing with integrity workshop (2024)South African Journal of Science: Writing with integrity workshop (2024)
South African Journal of Science: Writing with integrity workshop (2024)
Academy of Science of South Africa
 
A Strategic Approach: GenAI in Education
A Strategic Approach: GenAI in EducationA Strategic Approach: GenAI in Education
A Strategic Approach: GenAI in Education
Peter Windle
 
Assessment and Planning in Educational technology.pptx
Assessment and Planning in Educational technology.pptxAssessment and Planning in Educational technology.pptx
Assessment and Planning in Educational technology.pptx
Kavitha Krishnan
 
The simplified electron and muon model, Oscillating Spacetime: The Foundation...
The simplified electron and muon model, Oscillating Spacetime: The Foundation...The simplified electron and muon model, Oscillating Spacetime: The Foundation...
The simplified electron and muon model, Oscillating Spacetime: The Foundation...
RitikBhardwaj56
 
Digital Artifact 1 - 10VCD Environments Unit
Digital Artifact 1 - 10VCD Environments UnitDigital Artifact 1 - 10VCD Environments Unit
Digital Artifact 1 - 10VCD Environments Unit
chanes7
 
CACJapan - GROUP Presentation 1- Wk 4.pdf
CACJapan - GROUP Presentation 1- Wk 4.pdfCACJapan - GROUP Presentation 1- Wk 4.pdf
CACJapan - GROUP Presentation 1- Wk 4.pdf
camakaiclarkmusic
 
How to Add Chatter in the odoo 17 ERP Module
How to Add Chatter in the odoo 17 ERP ModuleHow to Add Chatter in the odoo 17 ERP Module
How to Add Chatter in the odoo 17 ERP Module
Celine George
 
Natural birth techniques - Mrs.Akanksha Trivedi Rama University
Natural birth techniques - Mrs.Akanksha Trivedi Rama UniversityNatural birth techniques - Mrs.Akanksha Trivedi Rama University
Natural birth techniques - Mrs.Akanksha Trivedi Rama University
Akanksha trivedi rama nursing college kanpur.
 
Lapbook sobre os Regimes Totalitários.pdf
Lapbook sobre os Regimes Totalitários.pdfLapbook sobre os Regimes Totalitários.pdf
Lapbook sobre os Regimes Totalitários.pdf
Jean Carlos Nunes Paixão
 
Azure Interview Questions and Answers PDF By ScholarHat
Azure Interview Questions and Answers PDF By ScholarHatAzure Interview Questions and Answers PDF By ScholarHat
Azure Interview Questions and Answers PDF By ScholarHat
Scholarhat
 
Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...
Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...
Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...
National Information Standards Organization (NISO)
 
Introduction to AI for Nonprofits with Tapp Network
Introduction to AI for Nonprofits with Tapp NetworkIntroduction to AI for Nonprofits with Tapp Network
Introduction to AI for Nonprofits with Tapp Network
TechSoup
 
C1 Rubenstein AP HuG xxxxxxxxxxxxxx.pptx
C1 Rubenstein AP HuG xxxxxxxxxxxxxx.pptxC1 Rubenstein AP HuG xxxxxxxxxxxxxx.pptx
C1 Rubenstein AP HuG xxxxxxxxxxxxxx.pptx
mulvey2
 
Liberal Approach to the Study of Indian Politics.pdf
Liberal Approach to the Study of Indian Politics.pdfLiberal Approach to the Study of Indian Politics.pdf
Liberal Approach to the Study of Indian Politics.pdf
WaniBasim
 
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...
PECB
 

Recently uploaded (20)

PCOS corelations and management through Ayurveda.
PCOS corelations and management through Ayurveda.PCOS corelations and management through Ayurveda.
PCOS corelations and management through Ayurveda.
 
বাংলাদেশ অর্থনৈতিক সমীক্ষা (Economic Review) ২০২৪ UJS App.pdf
বাংলাদেশ অর্থনৈতিক সমীক্ষা (Economic Review) ২০২৪ UJS App.pdfবাংলাদেশ অর্থনৈতিক সমীক্ষা (Economic Review) ২০২৪ UJS App.pdf
বাংলাদেশ অর্থনৈতিক সমীক্ষা (Economic Review) ২০২৪ UJS App.pdf
 
Types of Herbal Cosmetics its standardization.
Types of Herbal Cosmetics its standardization.Types of Herbal Cosmetics its standardization.
Types of Herbal Cosmetics its standardization.
 
PIMS Job Advertisement 2024.pdf Islamabad
PIMS Job Advertisement 2024.pdf IslamabadPIMS Job Advertisement 2024.pdf Islamabad
PIMS Job Advertisement 2024.pdf Islamabad
 
BÀI TẬP BỔ TRỢ TIẾNG ANH 8 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2023-2024 (CÓ FI...
BÀI TẬP BỔ TRỢ TIẾNG ANH 8 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2023-2024 (CÓ FI...BÀI TẬP BỔ TRỢ TIẾNG ANH 8 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2023-2024 (CÓ FI...
BÀI TẬP BỔ TRỢ TIẾNG ANH 8 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2023-2024 (CÓ FI...
 
South African Journal of Science: Writing with integrity workshop (2024)
South African Journal of Science: Writing with integrity workshop (2024)South African Journal of Science: Writing with integrity workshop (2024)
South African Journal of Science: Writing with integrity workshop (2024)
 
A Strategic Approach: GenAI in Education
A Strategic Approach: GenAI in EducationA Strategic Approach: GenAI in Education
A Strategic Approach: GenAI in Education
 
Assessment and Planning in Educational technology.pptx
Assessment and Planning in Educational technology.pptxAssessment and Planning in Educational technology.pptx
Assessment and Planning in Educational technology.pptx
 
The simplified electron and muon model, Oscillating Spacetime: The Foundation...
The simplified electron and muon model, Oscillating Spacetime: The Foundation...The simplified electron and muon model, Oscillating Spacetime: The Foundation...
The simplified electron and muon model, Oscillating Spacetime: The Foundation...
 
Digital Artifact 1 - 10VCD Environments Unit
Digital Artifact 1 - 10VCD Environments UnitDigital Artifact 1 - 10VCD Environments Unit
Digital Artifact 1 - 10VCD Environments Unit
 
CACJapan - GROUP Presentation 1- Wk 4.pdf
CACJapan - GROUP Presentation 1- Wk 4.pdfCACJapan - GROUP Presentation 1- Wk 4.pdf
CACJapan - GROUP Presentation 1- Wk 4.pdf
 
How to Add Chatter in the odoo 17 ERP Module
How to Add Chatter in the odoo 17 ERP ModuleHow to Add Chatter in the odoo 17 ERP Module
How to Add Chatter in the odoo 17 ERP Module
 
Natural birth techniques - Mrs.Akanksha Trivedi Rama University
Natural birth techniques - Mrs.Akanksha Trivedi Rama UniversityNatural birth techniques - Mrs.Akanksha Trivedi Rama University
Natural birth techniques - Mrs.Akanksha Trivedi Rama University
 
Lapbook sobre os Regimes Totalitários.pdf
Lapbook sobre os Regimes Totalitários.pdfLapbook sobre os Regimes Totalitários.pdf
Lapbook sobre os Regimes Totalitários.pdf
 
Azure Interview Questions and Answers PDF By ScholarHat
Azure Interview Questions and Answers PDF By ScholarHatAzure Interview Questions and Answers PDF By ScholarHat
Azure Interview Questions and Answers PDF By ScholarHat
 
Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...
Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...
Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...
 
Introduction to AI for Nonprofits with Tapp Network
Introduction to AI for Nonprofits with Tapp NetworkIntroduction to AI for Nonprofits with Tapp Network
Introduction to AI for Nonprofits with Tapp Network
 
C1 Rubenstein AP HuG xxxxxxxxxxxxxx.pptx
C1 Rubenstein AP HuG xxxxxxxxxxxxxx.pptxC1 Rubenstein AP HuG xxxxxxxxxxxxxx.pptx
C1 Rubenstein AP HuG xxxxxxxxxxxxxx.pptx
 
Liberal Approach to the Study of Indian Politics.pdf
Liberal Approach to the Study of Indian Politics.pdfLiberal Approach to the Study of Indian Politics.pdf
Liberal Approach to the Study of Indian Politics.pdf
 
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...
 

How to use ETFs in your futures trading strategy.pdf

  • 1. Futures Trading and ETFs: How to use ETFs in your futures trading strategy Futures Trading and ETFs: Futures trading and exchange-traded funds (ETFs) are two popular investment vehicles that can be used in conjunction to create a well-rounded trading strategy. By understanding the benefits and drawbacks of each, traders can make informed decisions on how to use ETFs in their futures trading strategy. Futures trading is a form of derivatives trading where a trader enters into a contract to buy or sell an underlying asset at a predetermined price and date in the future. This allows traders to take advantage of price movements and hedging opportunities in various markets, including commodities, currencies, and stock indexes. ETFs, on the other hand, are investment funds that track the performance of a specific group of assets, such as a stock index or a commodity. ETFs can be bought and sold just like stocks on an exchange, making them a convenient and liquid investment option. One of the main advantages of using ETFs in a futures trading strategy is the ability to diversify. By investing in an ETF that tracks a specific market or sector, traders can gain exposure to a wide range of assets without having to
  • 2. trade each individual stock or commodity. This can help to spread risk and reduce volatility in a portfolio. Another advantage is the ability to use ETFs for passive investing. ETFs can be a good option for traders who want to take a long-term approach and build a portfolio of diversified assets. By buying and holding ETFs, traders can potentially benefit from the underlying assets' long-term performance without the need for constant monitoring and adjustments. On the other hand, futures trading is more suitable for short-term and active traders. With futures trading, traders can take advantage of short-term market movements and profit from price changes in a specific market or sector. This requires more frequent monitoring and adjustments to a trading strategy. When using ETFs in a futures trading strategy, it is important to keep in mind that ETFs typically have lower liquidity than futures contracts. This can make it more difficult to enter or exit a position quickly, and may result in wider bid-ask spreads. Additionally, ETFs may have higher expense ratios than futures contracts, which can eat into returns over time. In conclusion, ETFs and futures trading can complement each other in a well- rounded trading strategy. By understanding the benefits and drawbacks of each, traders can make informed decisions on how to use ETFs in their futures trading strategy to diversify and spread risk while taking advantage of short-term market movements. It is important to keep in mind the liquidity and expense ratios when making these decisions.