Abstract

The efficiency of using stocks and Exchange Traded Funds (ETFs) in conjunction to create a spread while simultaneously implementing a hedging mechanism to minimize loss and maximize gains. This can be accomplished by using the Exchange Traded Funds and stock such as $NUGT, $DUST and $GOLD. By using ETFs and Stocks as a hedge there is the unique advantage of being able to maintain an unrealized gain or loss in either direction, and not expire worthless in the long term as what happens in options trading. To effectively be validated as an unbiased strategy, the results must be the same in a bullish or bearish scenario.

Keywords: ETFs, stocks, spread, hedge, paper loss, bullish, bearish

Introduction

Upon analysis of current instruments available in trading options, ETFs and stocks, specific strategies can be adopted when trading the gold commodity. By using ETFs and stocks as a pair or just leveraged or unleveraged ETFs which follow the underlying asset, there is the unique advantage of being able to maintain a longer running trading strategy and adjust the unrealized gain or loss according to the risk appetite and spread. The trading strategy allows for an upside in gains while curbing losses, independent of the fund manager’s bias in both a bullish and bearish scenario. The important initial consideration is the desired spread size and stop-loss, which upon definition, would determine the variables for creating the correct weighted position with the financial instruments selected and effectively create the spread and risk management strategy.

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Written by Michael Anton for Midas Invest.

Currencies of any type must have a reason for existence besides the store of value, and that is a form of usage.

We are at a point in time where high net worth buyers are taking an interest in NFTs and by bidding on them, create demand on the Ethereum network. The minting of new ERC-20 tokens which have embedded into their contracts burn addresses and NFT’s which use them as both a currency and tool to power network contracts has created a highly deflationary product.

The math couldn’t be more predictable: as the value and quantity of NFTs grow, the difficulty of mining Ethereum does as well with proof-of-work (PoW) migrating over to proof-of-stake (PoS) which is currently at 32 Ether to become a validator.

No other crypto currency has the usage adoption factor as high as Ethereum which at the current burn rate may become deflationary over time as the difficulty of mining increases with every fork implemented and the minting of new tokens, smart contracts and NFTs continue grow at an astounding rate and valuation.

Based on this assessment, we should see a multiplication many times over of the current spot price, as long as the market variables and demand remain consistent over the next 60 months.

This article was written by Michael Anton for Midas Invest