How to hedge your security position

(Read Chevreau’s Comments About the New ETFs)

ETFs are a great way to hedge your security positions, or just to take an open position. Unless you are trading a specific commodity, they are a much better way of taking a diversified approach to markets than
 through mutual funds, e.g. much lower MERs. As well, they are instantly liquid and can be traded daily if not intraday. I view them as something that must be traded since their longer term relationship to the commodity or basket of stocks will not remain constant. Also, keep in mind that C$ ETFs will change in price due to currency movement when the underlying security is priced in other than C$s, such as oil. ETFs are a great opportunity to make money. But be sure you understand what you are buying!