Friday, February 05, 2010

Fidelity Coup and F&O

It looked like Schwab had a good thing going when they announced their 8 commission free ETFs in December and then Fidelity comes and blows the doors off with a portfolio of 25 commission free offerings. These aren't newbie low volume ETFs, but tried and true ishares with high volume kickers like EEM and IWM featuring huge open interest and penny option spreads. Long time Schwab loyalists like myself are now faced with a simple business decision and the course of action seems pretty clear. With Fidelity's variety of ETFs it's possible to construct a relatively simple rotational model, both long and short term, using the AGG and TIP as hedges. If Fidelity would just throw a technology ETF, a commodity based ETF and few inverse ETFs into the mix they'd soon have the only game in town.

I've mentioned some of the free e-magazines before but here's a refresher on F&O, a product of the folks that publish Active Trader. This month's issue has some intriguing ideas, including a different spin on the butterfly setup and a simple Keltner channel system (for investor types).
If you visit the site you can also download the January issue, which contains a few more nuggets including the slingshot strangle, which looks like a timely strategy.
Although the title refers to futures and options, any trader worth his salt knows that many of these tactics and setups work effectively with stocks and ETFs.

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