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RichardTC

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RichardTC

Re: XSive post# 39301

Monday, 07/14/2008 9:10:28 AM

Monday, July 14, 2008 9:10:28 AM

Post# of 111154
I don't trade options and I would not advise trading options for novice traders with small portfolios. I don't trade DIA enough to know it's deviation pattern from the INDU. I will say this about Index ETFs in general, Index ETFs are only designed to mimic index price movements. The ETFs will not follow the index percises for a number of reasons: slight differences in holdings, operating expenses and liquidity related issues (wider bid/ask spreads, time/price lag, buy/sell order balancing and market maker interference).

The decision for selecting DIA vs GE should be a based on risk tolerance, definable/predictable trading patterns, your macro view and liquidity.
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