Comments on: ETF Mayhem http://www.ritholtz.com/blog/2008/12/etf-mayhem/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Sat, 21 Nov 2009 12:43:00 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: dpity http://www.ritholtz.com/blog/2008/12/etf-mayhem/comment-page-1/#comment-135489 dpity Wed, 24 Dec 2008 01:22:46 +0000 http://www.ritholtz.com/blog/?p=13603#comment-135489 This novice is a little confused: Had a Stop-Loss on SDS (-2x S&P) at $78, it opened at under $75 this morning per the above, but the Order wasn't triggered (thankfully). I now look at that still-open stop-loss order and it is at $62.50 -- apparently the price was automatically adjusted??? This novice is a little confused:

Had a Stop-Loss on SDS (-2x S&P) at $78, it opened at under $75 this morning per the above, but the Order wasn’t triggered (thankfully). I now look at that still-open stop-loss order and it is at $62.50 — apparently the price was automatically adjusted???

]]> By: ZackAttack http://www.ritholtz.com/blog/2008/12/etf-mayhem/comment-page-1/#comment-135444 ZackAttack Tue, 23 Dec 2008 21:31:33 +0000 http://www.ritholtz.com/blog/?p=13603#comment-135444 RealMoney has a hate-on for these because it seems largely populated with long-predominantly value-oriented managers. The big, liquid ones seem to track pretty well: DXD, SSO, DDM, etc. But the sector and overseas ones track for squat. Or else they track something I really don't understand, such as a China index that's at all-time highs. My opinion is, if you're going to use these things, they've gotta be green banana trades. RealMoney has a hate-on for these because it seems largely populated with long-predominantly value-oriented managers.

The big, liquid ones seem to track pretty well: DXD, SSO, DDM, etc.

But the sector and overseas ones track for squat. Or else they track something I really don’t understand, such as a China index that’s at all-time highs.

My opinion is, if you’re going to use these things, they’ve gotta be green banana trades.

]]> By: Steve Barry http://www.ritholtz.com/blog/2008/12/etf-mayhem/comment-page-1/#comment-135438 Steve Barry Tue, 23 Dec 2008 21:11:40 +0000 http://www.ritholtz.com/blog/?p=13603#comment-135438 @HT For QID, the $9.51 distribution is 9.499 short-term cap gain, 0.0057 dividend. The gain is paid on 12/30, which means you don't have access to the money for a few days. I will immediately re-invest it in QID at these bargain prices. Remember put calls, short interest and blogger polls are all at multi year bullish levels...you have to fade them. @HT

For QID, the $9.51 distribution is 9.499 short-term cap gain, 0.0057 dividend. The gain is paid on 12/30, which means you don’t have access to the money for a few days. I will immediately re-invest it in QID at these bargain prices. Remember put calls, short interest and blogger polls are all at multi year bullish levels…you have to fade them.

]]> By: H.T. http://www.ritholtz.com/blog/2008/12/etf-mayhem/comment-page-1/#comment-135436 H.T. Tue, 23 Dec 2008 21:03:17 +0000 http://www.ritholtz.com/blog/?p=13603#comment-135436 @steve--thanks. so are you saying that it is a cap gain? if so great... i'll pair off the short ETFs with the corresponding longs and be 'neutral' to capture the gain to offset losses until next year. @steve–thanks. so are you saying that it is a cap gain? if so great… i’ll pair off the short ETFs with the corresponding longs and be ‘neutral’ to capture the gain to offset losses until next year.

]]> By: Steve Barry http://www.ritholtz.com/blog/2008/12/etf-mayhem/comment-page-1/#comment-135435 Steve Barry Tue, 23 Dec 2008 20:59:33 +0000 http://www.ritholtz.com/blog/?p=13603#comment-135435 This was all known if you had read this blog a few months back...because ETFs like QID use options to meet their objective, the IRS requires them to make these short term distributions. If you hold them in an IRA, its no problem. Oustide the IRA, you have to pay the taxman, unless you have some tax loss carry forward. Was a big one though. This was all known if you had read this blog a few months back…because ETFs like QID use options to meet their objective, the IRS requires them to make these short term distributions. If you hold them in an IRA, its no problem. Oustide the IRA, you have to pay the taxman, unless you have some tax loss carry forward. Was a big one though.

]]> By: H.T. http://www.ritholtz.com/blog/2008/12/etf-mayhem/comment-page-1/#comment-135429 H.T. Tue, 23 Dec 2008 20:25:49 +0000 http://www.ritholtz.com/blog/?p=13603#comment-135429 Since when did ETF's pay out cap gains? Unless my calculus is off,the ultra short pro shares just went ex at 30% + NAV. That's not dividends. Anyone any idea on if this also applies to ultra longs? [assuming they had cap gains? LOL] The lack of having to pay out cap gains from PM's trading activity --even in down years-- is a major benefit to ETF's-- at least conventional ones. Any idea how this "pay out" will be treated in terms of div [qualified or not] v. cap gains??? blind sided by this one tx Since when did ETF’s pay out cap gains? Unless my calculus is off,the ultra short pro shares just went ex at 30% + NAV. That’s not dividends. Anyone any idea on if this also applies to ultra longs? [assuming they had cap gains? LOL] The lack of having to pay out cap gains from PM’s trading activity –even in down years– is a major benefit to ETF’s– at least conventional ones.

Any idea how this “pay out” will be treated in terms of div [qualified or not] v. cap gains???

blind sided by this one

tx

]]> By: jw http://www.ritholtz.com/blog/2008/12/etf-mayhem/comment-page-1/#comment-135397 jw Tue, 23 Dec 2008 17:52:22 +0000 http://www.ritholtz.com/blog/?p=13603#comment-135397 The Korea Fund is not "up"-- that's a reverse stock split. BR: all I see is your headline. The Korea Fund is not “up”– that’s a reverse stock split.

BR: all I see is your headline.

]]> By: DL http://www.ritholtz.com/blog/2008/12/etf-mayhem/comment-page-1/#comment-135381 DL Tue, 23 Dec 2008 17:06:31 +0000 http://www.ritholtz.com/blog/?p=13603#comment-135381 QID is paying a $9.50 dividend. During the entire course of 2007, total dividends paid were only $1.78 (source: Yahoo finance). I don’t see why the dividend has to be so much bigger this time around. Also, they should have announced this in advance; I was watching for it, but didn’t see it. QID is paying a $9.50 dividend.

During the entire course of 2007, total dividends paid were only $1.78 (source: Yahoo finance).

I don’t see why the dividend has to be so much bigger this time around.

Also, they should have announced this in advance; I was watching for it, but didn’t see it.

]]> By: jacobsk http://www.ritholtz.com/blog/2008/12/etf-mayhem/comment-page-1/#comment-135373 jacobsk Tue, 23 Dec 2008 16:53:29 +0000 http://www.ritholtz.com/blog/?p=13603#comment-135373 SDS was down ~$12 in the morning. later found out that they paid dividend and cap gain for ~$12. Cramer has no clue. SDS was down ~$12 in the morning. later found out that they paid dividend and cap gain for ~$12.
Cramer has no clue.

]]> By: Moss http://www.ritholtz.com/blog/2008/12/etf-mayhem/comment-page-1/#comment-135364 Moss Tue, 23 Dec 2008 16:36:13 +0000 http://www.ritholtz.com/blog/?p=13603#comment-135364 Large price swings in many ETF's due to payment of distributions in the form of short and long term capital gains. Underlying prices will adjust according some holders may be dumping them to avoid the tax hit on the distributions. Large price swings in many ETF’s due to payment of distributions in the form of short and long term capital gains. Underlying prices will adjust according some holders may be dumping them to avoid the tax hit on the distributions.

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