The Evolution of ETFs

 Blackrock, a leader in the ETF space, has begun to offer a target date product that gradually converts a portion of the allocation to an annuity that will provide a stable income in retirement. Some companies have adopted this product as the default option in their company-sponsored retirement plans. See article here: WSJ.

Nvidia Shorts Experience Big Losses

 After its most recent earnings report, which was strongly positive, Nvidia stock continued its significant rise. While this is favorable for traditional investors, short sellers lost over $3 billion as a result. See the article, here (Bloomberg).

0DTE (Zero Days to Expiration) Options

 The newest craze seems to be daily options. In fact, almost half of all options fall in this category. Many investors are using them in a way that resembles gambling, which has raised attention and criticism. Check on this article at WSJ.

Dollar Weighted Returns and Market Timing

Retail investors are generally poor market timers. As such, the return they actually earn (what we call dollar weighted, or asset weighted, returns) is generally much lower then the return a fund manager otherwise provides (what we would call compounded buy and hold returns). Check out this article (WSJ) for more on the return gap across different fund types and different levels of market volatility. 

Zero Day Options

 The fastest growing area in the option market  is so-called "Zero Day Options," which expire the same day they are issued. These are attractive to day traders and others looking to benefit from a quick movement in a stock's price. Surprisingly, their fast growth means that these options now represent almost 40 percent of daily option volume. See more information here (Bloomberg).

Tesla Shorts Finally Win

Over the past few years, Tesla has had a large short interest, yet the stock kept rising. However, in 2022, fortunes changed, and Tesla dropped over 60 percent, bringing a large return to the bears. See article here, Yahoo!.

Single Stock ETFs

The primary purpose of ETFs is to create easily traded baskets of underlying securities. So, why would single stock ETFs exist since investors could simply invest in the underlying security directly? The answer is that single stock ETFs are generally either levered or inverse funds. See article here, CNBC.