Tuesday, December 03, 2019

Is TNA a stock?

      This post is a continuation of the $50 a month stock challenge I started October 14, 2019.  Click on, "No Commission Stock Trades", on the right side of the page to read from the start. 


     TNA is not a stock but it trades like one. TNA is a ETF (exchange traded fund). Everyone has heard of "Mutual Funds", they are funds that are managed and you have to "buy" into them. Think of them as a "investment club" that you put money in though the manager. Your money is not instantly invested and you may pay a penalty for withdrawals (and can take some time).
 
     An EFT trades on the stock exchange just like company stocks. Buy and sell just like any other stock.

     TNA is a 3 x leveraged fund tracking the Russell 2000. The DOW tracks 30 stocks, the S&P tracks 500 stocks and the Russell 2000 tracks 2000 "small cap stocks (smaller companies).

     Because it is "Leveraged x 3", it seeks to track the Russell 2000 up or down by a multiple of 3.
The price can make large swings up and down. 1% daily swings are SMALL swings with 2% - 4% not uncommon.

     I have been trading TNA for several years using "covered calls". This small account is not eligible to trade "covered calls", so I will not be covering how to use them. I just mentioned it so show I do have experience with TNA.

     With TNA, you "take your money and run".

Disclaimer, I am not a professional.

   

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