Jump to content

ETP - Exchange Traded Product


Marcraffard

Recommended Posts

Hello Everyone,

The purpose of this post is to introduce an asset class sometime unknown by investors, ETPs (Exchange Traded Product).

ETPs allow you to trade stocks, indices, currencies, commodities and even cryptocurrencies … in a regulated environment, with products that are available directly from a sharedealing account (like IG ShareDealing). Most of the time with a low minimum amount.

The term ETP actually includes ETFs (which you may know), ETCs (Exchange Traded Commmodities / Currency) and ETNs (Exchange Traded Note).

It can allow leverage or short position but not only, you can find Delta one ETP as well!

I will be happy to answer your questions regarding this type of product.
I will not mention any issuer or specific product here, only answering generic questions. 

Edited by Marcraffard
correction
Link to comment

ETN - Access to Less Explored Markets and Assets

ETN investors are able to access the markets and broad asset classes that are out of their reach. It creates immense possibilities for them to make profits from volatility and liquidity.

With IG, you can access these product via the ShareDealing Account.

or most of the time, they are available as CFD with IG :) 

Link to comment
22 hours ago, Marcraffard said:

I will be happy to answer your questions regarding this type of product.
I will not mention any issuer or specific product here, only answering generic questions. 

Hi, I saw this article recently on crypto ETPs, as the FCA has banned leveraged crypto trading in the UK recently might this be an option for crypto traders in the UK in the future and your views as to suitability to trade if so? 

Europe’s Largest Crypto Asset Manager Launches Bitcoin ETP on SIX | Finance Magnates

 

.

  • Like 1
Link to comment

Hi Caseynotes,

The FCA did not ban only leveraged crypto trading like CFD, Option and Futures... but all derivaties, including ETP/ETN. FCA bans the sale of crypto-derivatives to retail consumers.

https://www.fca.org.uk/news/press-releases/fca-bans-sale-crypto-derivatives-retail-consumers

This ban is applicable only to retail investors, so the only way I saw for UK investors to have access to it => being professional investors.

Link to comment
On 19/01/2021 at 13:45, Marcraffard said:

Hello Everyone,

The purpose of this post is to introduce an asset class sometime unknown by investors, ETPs (Exchange Traded Product).

ETPs allow you to trade stocks, indices, currencies, commodities and even cryptocurrencies … in a regulated environment, with products that are available directly from a sharedealing account (like IG ShareDealing). Most of the time with a low minimum amount.

The term ETP actually includes ETFs (which you may know), ETCs (Exchange Traded Commmodities / Currency) and ETNs (Exchange Traded Note).

It can allow leverage or short position but not only, you can find Delta one ETP as well!

I will be happy to answer your questions regarding this type of product.
I will not mention any issuer or specific product here, only answering generic questions. 

Hi

I've traded ETF's and ETC's since the early 2000's - Biggest bug bear was quickly finding those products priced in GBP and not USD

My charting software has solved this issue

Maybe a good post would be to explain the pro's and con's for Leveraged products - holding for long and short term etc and Delta one too

 

  • Like 1
Link to comment

Hi THT,

Thank you very much for your message. I think you can find now some products priced in GBP and listed on the LSE.

I will take some time to make a longer pro/con comparison regarding Leveraged and Short ETP, but in a nutshell, pro= you cannot lose more than the money you put in it.. con= if you hold it for more than one day the compounding effect can change a lot your performance.

 

Link to comment
On 19/01/2021 at 13:45, Marcraffard said:

Hello Everyone,

The purpose of this post is to introduce an asset class sometime unknown by investors, ETPs (Exchange Traded Product)....

Hi, thank you for bringing the topic , I personally didn't know about this type of asset class.

I googled a bit and found the basics about ETPs. They seem to be very interesting but also oriented to professionals as some of them might not be regulated by the FCA as per link below:

https://www.fca.org.uk/consumers/exchange-traded-products

Could you recommend any book on the subject that we could read?

Also is there any list of pros and cons against the usual share dealing, CFDs and Spread Betting accounts that we could point to?

 

Edited by jlz
Link to comment
51 minutes ago, jlz said:

Hi, thank you for bringing the topic , I personally didn't know about this type of asset class.

I googled a bit and found the basics about ETPs. They seem to be very interesting but also oriented to professionals as some of them might not be regulated by the FCA as per link below:

https://www.fca.org.uk/consumers/exchange-traded-products

Could you recommend any book on the subject that we could read?

Also is there any list of pros and cons against the usual share dealing, CFDs and Spread Betting accounts that we could point to?

 

Hi JLZ

You need to investigate the company issuing the said ETP's - There's lots of different ones out there, some buy real assets, so use "synthetic" tracking etc  - they are 100% legit but you have to be certain they won't go bust 

Key considerations as you are investing real money into the ETP are:

  • Is the ETP safe in terms of going bust
  • Is you ISA/SIPP/DEALING account provider safe

I've traded these products for decades - as long as the ETP provider does not go bust then normal investing/trading risks apply - I've just literally this afternoon taken profits on a Nasdaq100 ETF

They came on the scene in the late 90's in the UK and you could track markets not offered by funds at that point - I was in a china ETF in 2000 provided by ishares within my sipp/isa account and was a cheap way of tracking the Chinese market as you didn't have the 5% bid/offer spread and 1% AMC

You buy them exactly as you would say BP - If BP goes belly up overnight you're cash is trapped, same would apply here, but as I say if the company is liquid and sound then normal risks apply

 

  • Like 1
Link to comment
Guest Tihomir

Thanks for bringing this topic. It's a very interesting asset class, in my view. 

ETP investment products lead to multiple opportunities to unlock alpha. Can be used for tactical allocation based on the market volatility, swing trading or event driven strategies. However, those products are suitable for investors that fully understand the risks embedded. 

End of last year invested in GraniteShares 3x Long Tesla Daily ETP, pretty happy with the performance. 

Link to comment

Thanks for the post. 

I would be interested in understand the costs associated with the relevant ETF.

Do they carry the same sort of fees as one would expect from investing in the fund directly (management, performance, early exit etc.) or are they limited to the usual dealing costs - commission, SDRT?

Also, for my clarity, we are talking about fund which may be issued by large investment managers (e.g. Blackrock - iShares, Baillie Gifford, PIMCO etc.) which are traded on the LSE

  • Like 1
Link to comment
On 20/01/2021 at 12:26, Marcraffard said:

Hi Caseynotes,

The FCA did not ban only leveraged crypto trading like CFD, Option and Futures... but all derivaties, including ETP/ETN. FCA bans the sale of crypto-derivatives to retail consumers.

https://www.fca.org.uk/news/press-releases/fca-bans-sale-crypto-derivatives-retail-consumers

This ban is applicable only to retail investors, so the only way I saw for UK investors to have access to it => being professional investors.

Hi @Marcraffard, thanks for the reply, thought that might be the case, thanks for the info.

  • Like 1
Link to comment
23 hours ago, TFFX_ said:

Thanks for the post. 

I would be interested in understand the costs associated with the relevant ETF.

Do they carry the same sort of fees as one would expect from investing in the fund directly (management, performance, early exit etc.) or are they limited to the usual dealing costs - commission, SDRT?

Also, for my clarity, we are talking about fund which may be issued by large investment managers (e.g. Blackrock - iShares, Baillie Gifford, PIMCO etc.) which are traded on the LSE

Hi TFFX,

About the cost/fee to trade ETP (excluding brokerage fee/commission), it is variable and it depend of each product.

Like ETFs, there is no performance/entry/exit fee. The fee is included on the tprice.

Fees will be higher on ETP with underlying asset like crypto or small cap.

Leveraged and Short ETP will maybe higher too but insignificant since these are products designed for the very short term. i.e. 3LAL which is 3x Long Alphabet Daily ETP have a Total Daily Ongoing Cost of 0.0049%

In any case, you must check all cost on the KID that must be provided by the issuer.

Link to comment
  • 3 weeks later...
  • 2 weeks later...
  • 3 weeks later...
  • 1 month later...
Posted (edited)

Announcement - GraniteShares 3x Short Tesla ETP

Dear IG traders,

GraniteShares would like to inform you about our decision to consolidate the GraniteShares 3x Short Tesla ETP (3STS). For every 1,500 ETPs owned, investors will receive 1 new ETP in exchange.

Investors already invested in 3STS will own fewer ETPs than before the consolidation but the Value per ETP will be proportionally higher. As a result, there will be no impact on the value of your investment. If the consolidation results in any fractional securities, they will automatically be redeemed in cash.

The record date for the consolidation will be on 14th May 2021 with the consolidation date effective on 17th May 2021. Proceeds linked to fractional ETPs are expected to be transferred to the clearing systems on 19 May 2021. Please note it may take a few days for the payment to be received.

GraniteShares believes it is in the investors’ interest to keep ETP prices within efficient trading ranges, and to try and avoid situations where ETP prices become too low or too high.

GraniteShares will not charge any commissions or fees related to the consolidation of securities or disbursement of the payments if fractional securities are involved.

Please refer to the following link for more information: https://graniteshares.com/institutional/uk/en-uk/research/3sts-reverse-split-effective-17-may-2021/

In case of any additional questions, please let us know.

Edited by Marcraffard
Link to comment
  • 1 month later...
  • 2 weeks later...
GraniteShares: "The value of funds invested in our 3x short single stock ETPs listed on the London Stock Exchange was around $35m million on 1 December 2020, but this increased to around $140m by July this year".
Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      16,579
    • Total Posts
      79,211
    • Total Members
      65,062
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    ecou
    Joined 29/11/21 05:35
  • Posts

    • DOW JONES OUTLOOK – TALKING POINTS: Dow Jones down most in 13 months on “Omicron” Covid variant Breaking near-term support might expose 6-month range bottom Reclaiming a foothold above 35547 needed to neutralize sellers The Dow Jones Industrial Average equity index tracking 30 blue-chip US companies plunged on Friday, shedding an eye-watering 2.49 percent and marking the largest one-day loss in 13 months. The plunge came as the World Health Organization (WHO) identified a new worrying variant of Covid-19, dubbed “Omicron”. The mutant virus seems to have spread significantly in Africa. While vaccine efficacy against it is an open question, a UK health official warned they will “almost certainly” prove less potent. A slew of countries promptly moved restrict travel and investors rushed for the exits at the prospect of another economic shutdown. Prices are now testing major inflection-zone support anchored at 34690. Breaking below that may set the stage for an extension lower to challenge the floor for the range prevailing in the second half of the year, in the 32902-33383 region. A bit of friction may be seen at the 34170-398 congestion area along the way. Immediate resistance is at 35091, a minor barrier that has acted as short-term pivot since August. Above that, a meatier resistance block is capped at 35547. Overcoming the latter threshold – with confirmation on a daily closing basis – seems like a prerequisite for neutralizing near-term selling pressure. Dow Jones futures daily chart created with TradingView DOW JONES TRADING RESOURCES Just getting started in the markets? See our free trading guides What is your trading personality? Take our quiz to find out Join a free webinar and have your trading questions answered Written by Ilya Spivak, Head of Greater Asia at DailyFX.com. 29th November 2021
    • EURO, EUR/USD, US DOLLAR, CRUDE OIL, AUD, CAD, NOK, NZD - TALKING POINTS Euro retraced some of Friday’s gains as the market takes stock APAC equities were weaker and Treasury yields recovered The Fed tightening timeline is moving. Will EUR/USD go lower? The Euro gave up some of Friday’s gains against the US Dollar in Asia today. The tightening timeline for the Fed was pushed out and this had helped EUR/USD go higher. As the pace of the taper comes back in, so does demand for USD. Markets return to normal liquidity today after a wild ride to finish last week.US Treasury yields recovered roughly a third of their losses from Friday. Although there is a large degree of uncertainty around the impacts of Omicron, government policy in many countries is changing quickly. Japan has already moved to ban all foreign visitors from 30th November. Other governments are restricting travel to varying degrees. Markets are reacting to the potential economic impacts of these rule changes. Reports from the South African Health Department have indicated that they are of the view that the health impact may not be as severe as previous strains. Many countries are erring on the side of caution after the experience of the Delta strain wreaking havoc. In Asia today, markets took a deep breath and unwound some of the severe risk-off moves seen on Friday. The perceived safe-haven currencies of the Japanese Yen and Swiss Franc weakened but remain at lofty levels compared to prior to the outbreak news. APAC stocks were down on the day but have recovered from large early losses. The major equity indices across the region were weaker by less than 1%. At the time of going to print, US futures were indicating a positive day for North America bourses. Gold is slightly softer but crude oil was up over 5% at one stage in the Asian session, recovering from Friday’s 13% sell-off. The Norwegian Krone was the best performing currency as a result. The other commodity currencies of AUD, CAD and NZD were also firmer. Looking ahead, Fed Chair Jerome Powell and US Treasury Secretary Janet Yellen are due to appear before the Senate. The market will be on tenterhooks for any fresh news on Omicron. EUR/USD TECHNICAL ANALYSIS EUR/USD made a low last week at 1.11861 which is just above the June 2020 low of 1.11682. These levels could provide support. The rally on Friday saw EUR/USD cross above the 10-day simple moving average (SMA) but it remains below all other medium and long term SMAs. This might indicate that short-term momentum could be bullish bit longer term momentum potentially remains bearish. On the topside, the previous highs and pivot points at 1.13741, 1.15245, 1.16694 and 1.16922 are possible resistance levels. Chart created in TradingView   Written by Daniel McCarthy, Strategist for DailyFX.com. 29th November 2021
    • GOLD PRICE OUTLOOK: Gold prices seesawed on Omicron variant news as real rates rose Testimony from Fed Chair Powell now in focus, may offer support Technically, prices are testing the mettle of a three-month uptrend Gold prices seesawed as illiquid financial markets drained dry by US Thanksgiving holiday closures convulsed on World Health Organization (WHO) reports of a new “of-concern” Covid-19 variant, dubbed Omicron. Bullion initially rallied as bond yields fell and the futures-implied Fed rate-hike path flattened a bit for 2022-23. Gains would prove to be short-lived however, with a rapid intraday reversal bringing gold nearly all the way to flat by the daily close. Worries about a slowdown in growth in the event of another wave of lockdowns pulled down inflation expectations. In turn, that lifted real interest rates (nominal rates less expected inflation). This undermined gold’s store-of-value appeal. The metal yields nothing, but a return of 0% seems attractive when compared to a negative one on cash, after accounting for inflation. The rise in real rates cut into that appeal, pulling prices down off the highs as the markets weighed Omicron’s potential implications. The way forward may hinge on incoming comments from Fed Chair Jerome Powell. He is due to testify before Congress this week and will almost certainly face a grilling on how Omicron or even some future problematic variant might echo in the Fed’s rate-hike plans. Mr Powell may revert to a familiar script, reiterating the Fed party line that rapid reflation owes mostly to “transitory” factors and hinting that policymakers are not in a hurry. This might be amplified with some mention of two-way risk in the size of the monthly QE taper. Gold may find support against such a backdrop. GOLD TECHNICAL ANALYSIS – THREE-MONTH UPTREND IN THE BALANCE Gold prices are idling above support guiding them higher since August. Immediate resistance is capped at 1808.16, with a daily close above that exposing the next barrier at 1834.14. Alternatively, securing a break of 1750.78 might hand sellers the initiative, with support anchored at 1717.89 in view thereafter. Gold price chart created using TradingView GOLD TRADING RESOURCES What is your trading personality? Take our quiz to find out See our guide to build confidence in your trading strategy Join a free live webinar and have your questions answered Written by Ilya Spivak, Head Strategist, APAC for DailyFX. 29th November 2021.
×
×
  • Create New...