This Week In ETFs: October 23rd Edition

by on October 23, 2010

Another exciting week has left the financial industry with plenty to chew on for the last week of October. A number of industry bellwethers reported earnings, with some– such as– crushed expectations while others– such as Verizon—showed signs of slowing growth, worrying investors. All the while, the market as a whole has been on a roller coaster ride, with a triple digit loss on the Dow earlier in the week, only leading to a rebound back above the 11,000 mark by week’s end. Many hope that markets will settle now that the height of earnings season has past, but with the important G-20 meeting this weekend in Seoul, South Korea it seems unlikely that volatility will exit the market anytime soon. 

Below, we highlight three of the best ETF stories from around the Web during the last week:

Cotton Exposure Through ETFs by Matt McCall:

In the last three months, cotton futures have spiked to all-time highs and some believe that the surge may continue for the important commodity. Due to inclement weather across the globe, demand for cotton is likely to soon outstrip supply, which Matt believes will send cotton futures even higher. Matt McCall goes on to outline several ETP options to take advantage of a continuing surge in cotton prices for any investor looking to add a little fluff to their portfolio now that cotton is trading at his highest level since right after the U.S. Civil War.

NYSE: Timing Glitch Drove Monday’s Error in SPDR S&P 500 ETF at The Wall Street Journal:

Monday saw the world’s most popular ETF plummet nearly 10% at the end of the trading session despite a relatively calm day in the markets. While many scurried to sell, or perhaps buy in on the cheap, the drop in SPY was being fueled by a software error. The main culprit was determined to be a late auction for the ETF which occurred 15 minutes later than was planned, causing a massive drop that wiped out nearly $8 billion in assets from the ETF giant. NYSE later cancelled the trades that were placed during the drop and they ensured investors that this software update was a minor occurrence that would be taken care of.

Ten Commandments Of ETF Investing at ETF Database:

As ETFs continue their exponential growth in popularity, more and more investors have hopped aboard these relatively new products. In this article, Michael Johnston outlines ten important tips and facts that every ETF investor should be aware of, such as not using market orders recklessly, and using all the the free ETF resources available [see our free ETFdb tools here]. The article also clears up a number of ETF misconceptions, as well as giving insight on some key differences between the main types of exchange traded products.

Disclosure: No positions at time of writing