10 Reasons to Use ETFs When Trading Options
Michael Shulman, February 7, 2009
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If you want to minimize the volatility of a position, ETFs can help, and puts and calls on ETFs do the same.An individual semiconductor stock may move 10%-33% on a given day -- for or against you -- based on news and headlines. If you think chips, in general, are headed one way or another, you play the ETF -- in this case, calls on the ETF -- and they will turn out to be far less volatile than an individual stock. This eliminates surprise news having too great an impact on an individual position.
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