Intraday Trading in ETFs || #ETFInvestment

Basics of Stock Market by PRT

24 Sept 202411:25

Summary

TLDRThe video script discusses a secret trading strategy involving ETFs with low risk and high potential returns. The presenter explains how to capitalize on price differences and the concept of arbitrage strategies. They detail the process of tracking an ETF's intrinsic value, analyzing demand and supply, and executing trades based on market movements. The script also touches on leveraging opportunities for profit and managing risks, encouraging viewers to explore and apply the strategy over different time frames.

Takeaways

📈 This video discusses a secret trade opportunity that 99% of people are unaware of, focusing on low-risk strategies.
⚖️ The strategy involves arbitrage, capturing price differences to make a profit.
🔍 The example uses the NASDAQ-100 and its related ETF, which mirrors the index's performance.
💰 The ETF replicates its benchmark, meaning when the benchmark rises, the ETF does too, but it may lag due to demand and supply imbalances.
🛑 Despite the benchmark's rise, ETF prices may not immediately increase due to selling pressure from traders looking to book profits.
💡 A key opportunity lies in buying when the ETF price is lower than expected, anticipating that it will eventually rise to match its intrinsic value.
🔄 The ETF price fluctuates due to the dynamics of buying and selling pressure, creating chances for intraday trading gains.
📊 Traders can use leverage (up to 5x) to amplify potential returns in intraday trades, reducing the capital required.
🚨 The risk is low unless major news or a large supply flood occurs, which could cause a sudden drop in ETF prices.
🧠 The speaker encourages viewers to observe and test the strategy themselves before making any decisions, offering additional content on ETFs and algo trading if there’s interest.

Q & A

What is the main topic discussed in the script?
-The script discusses a secret trade strategy involving ETFs (Exchange-Traded Funds) and how to capitalize on price differences with low risk.
What does the speaker claim about the approachability of the trade strategy?
-The speaker claims that the trade strategy is not well-known, with an approachability of 99 out of 100, and they express their own surprise at sharing the strategy.
What is meant by 'arbitrage strategy' in the context of the script?
-In the script, 'arbitrage strategy' refers to a method of making money by capturing price differences where defense is coming in the price.
How does the speaker demonstrate the trade strategy using the example of a Gold ETF?
-The speaker explains that if Gold increases in value, the Gold ETF should also increase, and vice versa for a Bitcoin ETF—if Bitcoin falls, its corresponding ETF should also fall.
What factors influence the price of an ETF according to the speaker?
-The speaker mentions that the price of an ETF is influenced by the game of demand and supply, and the quantity of people wanting to buy or sell the ETF.
Why might the price of an ETF not rise even if it is expected to?
-The price of an ETF might not rise due to selling pressure, as sellers may not disclose their full quantity, and until the quantity for sale is bought, the price does not increase.
What is the speaker's strategy for trading intraday?
-The speaker's intraday trading strategy involves identifying opportunities where the price has significantly deviated and placing limit orders to capitalize on the price returning to its intrinsic value.
What is the significance of the 'intrinsic value' mentioned in the script?
-The 'intrinsic value' refers to the real or fundamental value of the ETF, and the speaker suggests that the price should eventually move towards this intrinsic value.
What is the speaker's advice regarding risk management when trading the discussed strategy?
-The speaker advises that as long as there is no significant news that could drastically affect the ETF, the risk is minimal, and the chances of making money are high.
How does the speaker suggest traders can benefit from the 'arbitrage opportunity'?
-The speaker suggests that traders can benefit from the 'arbitrage opportunity' by understanding the price movement and placing trades when the price deviates significantly from its intrinsic value.
What additional resources does the speaker offer to those interested in algorithmic trading?
-The speaker offers a giveaway for algorithmic trading software called 'algo rooms' and provides a number for interested parties to contact for more information.

Outlines

00:00

📈 Understanding Arbitrage Strategy

The speaker discusses a secret trade with an unknown 99% approachability, questioning why they are revealing it. They explain that it's because it's working. The trade involves low risk and is based on capturing price differences through an arbitrage strategy. The speaker will demonstrate this by showing the top 100 tech companies' price lock, which is the price from a day or trading day before. They discuss ETFs, their replication of a benchmark, and how they follow the price. The concept of demand and supply within ETFs is also touched upon, explaining how the price doesn't always reflect its intrinsic value due to market dynamics.

05:03

📉 Capturing Arbitrage Opportunities

The script continues with the speaker explaining how to find arbitrage opportunities when the price moves upwards and how to capitalize on them. They provide an example of a trade they made in the morning, showing a profit of approximately 22,000. The speaker emphasizes the low risk involved in trading ETFs, as they are less likely to fall drastically unless there is significant news. They also discuss the concept of leverage in intraday trading and how it can amplify profits. The speaker advises understanding the arbitrage opportunities and the intrinsic value of the trade to minimize risk.

10:03

💡 Exploring More Arbitrage Opportunities

In the final paragraph, the speaker encourages the audience to explore more arbitrage opportunities in various ETFs and to make their own decisions based on the information provided. They mention that there are many ETFs with good opportunities but emphasize the importance of understanding the volume and value within them. The speaker also discusses the availability of arbitrage opportunities and how some brokers do not offer them. They provide a link in the description for those interested in opening a demo account for free and mention a giveaway for their subscribers to access the Algo Rooms software for free. The speaker concludes by asking viewers to subscribe and click the bell icon to not miss any upcoming videos.

Mindmap

Keywords

💡arbitrage

Arbitrage refers to the practice of taking advantage of a price difference between two or more markets to make a profit. In the context of the video, it seems to be discussing a type of arbitrage strategy where the speaker is capturing price differences to earn money. The video mentions 'arbitrage' in relation to a trade that is working well, indicating that the speaker is using this strategy to profit from market inefficiencies.

💡ETF

ETF stands for Exchange-Traded Fund, which is a type of security that involves a collection of securities such as stocks, bonds, or commodities. In the video, the speaker talks about tracking an ETF and how it replicates a benchmark that it follows. The video script mentions 'ETF' in the context of trading strategies, suggesting that the speaker is using ETFs as part of their investment approach.

💡intrinsic value

Intrinsic value is an estimation of the true value of an asset or a company based on its fundamentals. In the video, the speaker discusses the intrinsic value in relation to the price of an ETF, implying that the price should eventually align with its intrinsic value. The concept is used to explain why the speaker believes the price will rise, as it is currently below its intrinsic value.

💡demand and supply

Demand and supply are economic concepts that influence prices. In the video, the speaker talks about the dynamics of demand and supply within an ETF, explaining how the balance between buyers and sellers can affect the price. The script mentions that if there is more selling pressure, the price may not rise to its intrinsic value, illustrating the impact of market forces on pricing.

💡intraday trading

Intraday trading is the practice of buying and selling financial instruments within the same trading day. The video script discusses an intraday trade that the speaker made, highlighting the use of leverage and the potential profits from such a trade. The concept is integral to the video's theme, as it showcases a specific trading strategy that the speaker employs.

💡leverage

Leverage in trading refers to using borrowed money to increase the potential return of an investment. The video mentions a '5x leverage' that the speaker has access to for intraday trading, which amplifies both potential gains and losses. The concept is important in the video as it explains how the speaker is able to achieve significant profits with a relatively small investment.

💡profit booking

Profit booking is the act of selling an asset to realize a profit. In the video, the speaker discusses how profit booking can lead to price fluctuations, as people often sell when they see the price rising. The concept is used to explain market behavior and how it can create opportunities for arbitrage or other trading strategies.

💡fluctuation

Fluctuation refers to the movement or change in the price of a security. The video script mentions the fluctuation in the price of an ETF, indicating that the speaker is observing these changes to identify trading opportunities. The concept is central to the video's theme, as it relates to the speaker's strategy of capitalizing on price movements.

💡limit order

A limit order is an order to buy or sell a security at a specific price or better. In the video, the speaker mentions placing a limit order for intraday trading, which allows them to buy at a certain price. This concept is important as it demonstrates the speaker's trading tactics and how they manage risk by setting a specific price at which they are willing to trade.

💡algorithmic trading

Algorithmic trading is a method of trading that uses predefined algorithms to place orders. The video script briefly touches on algorithmic trading, suggesting that the speaker uses algorithms to trade their ETFs. This concept is relevant as it indicates a more systematic and potentially automated approach to the trading strategies discussed in the video.

💡subscription

In the context of the video, a subscription likely refers to a subscriber base, which is the audience that follows and engages with the speaker's content. The speaker mentions subscribers in relation to providing exclusive content, such as access to algorithmic trading software for free. The concept is important as it highlights the relationship between the speaker and their audience, as well as the value they offer to retain and grow their subscriber base.

Highlights

Discussing a secret trade with an approach that many are unaware of.

The trade involves low risk and can be described as an arbitrage strategy.

Arbitrage means capturing price differences to make money.

Explaining the concept of ETFs and how they replicate a benchmark.

Discussing the importance of following the price of the underlying asset of an ETF.

Mentioning the demand and supply dynamics within ETFs.

Highlighting the selling pressure in an ETF and its impact on price.

Explaining how price doesn't always reflect intrinsic value due to market dynamics.

Discussing the fluctuation in prices and the potential for profit booking.

Providing an example of a trade made in the morning and its potential profit.

Mentioning the use of leverage in intraday trading and its associated risks.

Stressing the importance of understanding arbitrage opportunities for profit.

Explaining the concept of intrinsic value and how it affects price movement.

Discussing the potential for price to move to its intrinsic value despite short-term fluctuations.

Providing a practical example of a trade setup and its execution.

Discussing the potential for profit booking at the price of 1 due to daily fluctuations.

Explaining the importance of holding a trade to reach intrinsic value.

Mentioning the lack of reasons for the price to go down while the market is closed.

Discussing the potential for significant profit-making opportunities with this trading strategy.

Providing a simple trade setup example and explaining its logic.

Encouraging viewers to observe the strategy over different time frames to make their own decisions.

Mentioning the availability of free demo accounts for those interested in algorithmic trading.

Inviting viewers to share their thoughts in the comments for further discussion on ETF trading strategies.

Promoting the channel and encouraging viewers to subscribe and turn on notifications for future videos.