FAQs Archive - Page 2 of 2 - Right Side Of The Chart

Q: What is a K-1 and which ETFs issue them?

A K-1 is a tax document used to report share of profits and losses from interests in limited partnerships. Due to their legal structuring, many ETPs (exchange traded products) issue K-1's instead of the more common 1099 tax form. Additional information on K-1's, along with a list of ETPs which issue K-1's, can be found in this brief article from Yahoo Finance: ETF Tax Tutorial: Complete List Of ETFs That Issue A K-1

Q: What Is An ETF, ETN, or ETP?

Definitions of 'Exchange Traded Products' (ETP) & 'Exchange-Traded Fund' (ETF), as per Investopedia: An Exchange Traded Product, or ETF, is a type of security that is derivatively-priced and which trades intra-day on a national securities exchange. Exchange Traded Products are derivatively-priced, where the value is derived from another investment instruments such as a commodity, currency, share price or interest rate. Generally, exchange traded products are benchmarked to stocks, commodities, indices or they can be actively managed funds. Exchange traded products include exchange traded funds (ETFs), exchange traded vehicles (ETVs), exchange traded notes (ETNs) and certificates. The most popular exchange traded product is the exchange traded fund (ETF). These are securities that track an index, commodity or basket of assets. Exchange traded notes, on the other hand, are a type of unsecured, unsubordinated debt security. The value of an ETN can be affected by the credit rating of the issuer and not just changes in the underlying index. Exchange traded products have experienced huge growth since they were introduced. Different tax treatment applies to the various types of exchange traded products. Because it trades like a stock, an ETF does not have its net asset value (NAV) calculated every day like a mutual fund does. By owning an ETF, you get the diversification of an index fund as well as the ability to sell short, buy on margin and purchase as little as one share. Another advantage is that the expense ratios for most ETFs are lower than those of the average mutual fund. When buying and selling ETFs, you have to pay the same commission to your broker that you'd pay on any regular order. One of the most widely known ETFs is called the Spider (SPDR), which tracks the S&P 500 index and trades under the symbol SPY.

Q: Are the trade ideas on RSOTC investing or trading recommendations?

No, the trade ideas on RSOTC are NOT investment or trading recommendations. Right Side Of The Chart LLC (RSOTC) is neither a Broker Dealer nor an investment advisor. The information provided from RSOTC, including market analysis, trading & investing ideas neither is, nor should be construed, as an offer, or a solicitation of an offer, to buy or sell securities. You shall be fully responsible for any investment decisions you make, and such decisions will be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance, and liquidity needs. All trading and investment ideas on RSOTC are for educational or illustrative purposes only.