How to use Real-time data in trading
As ETFs are traded on the stock exchange, all fund units are updated continuously and to the second. This means that the investor has an exact value indication available at all times and can decide whether the purchase of further units is an option for him or whether he would rather sell. The provision of real-time data ensures active trading in securities, giving investors the highest possible transparency regarding the value of their fund units.
If the market situation permits, units can be bought and sold several times a day. By trading on the stock exchange, the investor has the possibility to enter and exit the trade himself at any time via the securities account and to trade in real time, but the costs per order should not be neglected, which add up with a high number of orders. In this way, an ETF differs significantly from the classic index funds. Their shares are issued by an investment company, and buying and selling is only carried out by this investment company. The prices are only determined once a day, so trading is considerably slower. Unfortunately, such funds do not offer a high degree of transparency, which is why investors cannot react effectively to market movements.
This is different with an ETF, where there is a high level of market transparency at all times. Private investors can therefore buy and sell securities as they wish at any time, as seems appropriate according to the current market situation.
Favourable costs for traders
ETFs are characterised by a very simple and clear cost structure. This is of course interesting for newcomers to securities accounts, but experienced traders in particular benefit from regularly changing their trading positions and selling or buying new shares, whereby the costs per order should not be neglected. Since the fees increase with the trading volume, active traders must always keep an eye on the development of the costs when buying and selling fund units.
With ETFs, this is particularly easy due to the simple fee structure. Because they are traded on the stock exchange, there is no front-end load. Only the usual stock exchange fees are payable; depending on the stock exchange and the investment product, they amount to between 0.05 percent and 0.5 percent of the invested sum. ETFs can also be traded over the counter. In this case, the regular exchange fees are usually waived, but not all ETFs are available in the offer of every online broker. In addition, there are the ongoing management fees of the ETF providers, but due to the passive management of the ETFs these are more favourable than with the purchase and sale of classic fund units. The range of custody accounts is extensive, as is the range of brokers. Popular brokers are, for example, Exness download broker.
ETF savings plans - passive investing made easy
The ETF savings plan offer is also growing at various online brokers. This is because ETFs are not only attractive for investors who keep an eye on prices and buy and sell their ETF shares quickly, but also represent attractive passive investments through an ETF savings plan. You also don't have to set aside amounts starting at 1,000 euros right away, because even small, regular deposits as low as 25 euros can build up a small fortune, and an ETF savings plan offers precisely this long-term and stable opportunity. Due to the low administration costs, the costs usually amount to a few euros per year or per month. Some brokers also offer free ETF savings plans.
