I don't really know what the reason is that they arn't shortable? The patterns have been so bearish and everytime I see a new one i get excited only to place the order and have it be rejected.
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Shorting closed end funds
- Thread starter kidPWRtrader
- Start date
Hmm... I just signed up to MBtrading.
Not 21 unfortunetely so that sucks considering I wanted to sign up to IB. Still better than scottrade though...
Not 21 unfortunetely so that sucks considering I wanted to sign up to IB. Still better than scottrade though...
Cause they are closed ended. Shorts need not apply. once the fund is closed your stuck.
Closed-ended funds are NOT ETFs. They're a set of investment vehicles usually designed for yield, mainly holding equities and bonds. See www.cefa.com.
ETFs usually do not trade at discounts to NAV (thanks to arbitrage), many CEFs usually do due to the fact they're closed-ended.
ETFs usually do not trade at discounts to NAV (thanks to arbitrage), many CEFs usually do due to the fact they're closed-ended.
Quote from makloda:
Closed-ended funds are NOT ETFs. They're a set of investment vehicles usually designed for yield, mainly holding equities and bonds. See www.cefa.com.
ETFs usually do not trade at discounts to NAV (thanks to arbitrage), many CEFs usually do due to the fact they're closed-ended.
I stand corrected.
-Neo
Although this is off topic ETF tens to be much better than closed end funds
Really hard to compare both, they serve different purposes. If your goal is equity/bond exposure combined with monthly dividends then CEFs can do the job, at a discount to NAV which can serve as a margin of safety. Most ETFs do not pay (big) monthly dividends but they almost always trade very close to their intrinsic NAV and are more liquid/have smaller bid/ask spreads than most CEFs.Quote from stock_trad3r:
Although this is off topic ETF tens to be much better than closed end funds
I used to own GF (germany fund) which was a closed end fund and it became extremely volatile and underperformed its underlying asset. Since it uses a standard bid/ask system a single seller could drive the fund much lower without much effort.