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Introduction > Stocks and trading > ETF > How to trade ETFs

How to trade ETFs

ETF is the abbreviation for Exchange Traded Fund, for which other terms such as iShare, SPDR or index stocks are also used. These funds are traded on global markets the same as the stocks of important companies. As opposed to active management of mutual funds by expensive managers, ETF investments occur using a specific algorithm.

The algorithm is the index, or in other words, it exactly copies the composition of the selected index using the known composition of assets in the index. Fund management is thereby reduced and remains the same for the duration in which the composition of the index does not change, once such change occurs, the changes must also be made in the ETF portfolio and since this increases of decreases the volume of the fund, the positions must be proportionally changed so that the ETF continues to match the composition of the index.

You can find more information about trading stock exchange funds here.


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