Hi. I seem to recall there was once a post about using ETFs in place of CFDs for Z3 (& maybe other strategies?), but I can't find it. I would appreciate thoughts on this:

- Link to the post(s)?
- Best CFD<->ETF equivalences?
- If the ETF is not leveraged, set leverage to 1 in the csv?
- Or, use a Leveraged ETF? With leverage in the csv still set to 1? Or to the ETF's leverage?
- Any other thoughts?

Thanks.

Z3 can theoretically also work with ETFs, but is more effective with CFDs. ETFs are better for long term trades, CFDs for short term trades. They have similar price curves, but a very different leverage and cost structure.

Thanks @jcl.

I (think I) understand those similarities and differences in theory, but wanted to Test to see what actually bears out. The questions above were to be able to do that:

- Rather than re-inventing the wheel, is there somewhere a list of which ETFs best match which CFDs? (Preferably the Z3 CFDs )

- It seems obvious if the ETF is not leveraged to set Leverage to 1 in the csv. But if the ETF is leveraged, that happens "within the ETF" rather than "at the Broker", so should Leverage also be kept at 1 in this case?

Thanks.

@jcl,

I'm finally getting back to thinking/trying/Testing this again... But it seems Z3 is hard-coded to look for CFD-named files? F.i., if I change AssetsFix.csv so the Symbol for SPX500 is SPY, Z3 still looks for SPX500.t6, not SPY.t6. How can I fix this?

Thanks.

Rename SPY.t6 to SPX500.t6. And ETFs are normally leveraged 2:1 when your account is a margin account.

Thanks @Petra.

Renaming History files: Will obviously work, but as a general practice would become a housekeeping nightmare! Do we really want to proliferate files whose data doesn't match their name? It would seem there has to be a better way. Shouldn't the History file be pulled based on the Symbol name, as when getting the data from the Broker?

Leverage: As always, a confusing topic. Are you talking about the Leverage the Broker may apply based on account size, type, whatever? Or are you talking about leveraged ETFs? If the former, and the latter is used, is then Leverage multiplied to 4x, 6x, whatever?

Thanks.

@Petra, @jcl,

Would appreciate your thoughts on the above.

Thanks.

Absolutely not! Symbols can and do have all kinds of illegal characters that are not compatible with your filesystem. (This is your broker's fault.) That's why Asset names have strict naming conventions.This was in reference to the standard (Regulation T) Margin account, where you get approximately 2:1 leverage for most stocks and ETFs. You get even more leverage for leveraged ETFs (or at least the security itself is constructed as such). You get less leverage when your broker decides to change the margin requirements for an individual symbol, as was the case with GameStop during the Diamond Hands incident. You can get even more leverage for most all products with a Portfolio Margin account, but you must have a ton of money in your account.

When in doubt, check your broker's margin requirements for any given symbol and account type.

Thanks @AndrewAMD.

Symbols: *sigh* Stuck with the maintenance nightmare, then. Will probably use .ini History, overlay, & symbolic links to help...

Leverage: I was actually asking the Assets<x>.csv question. Is the Leverage field in Assets<x>.csv the leverage the broker provides for that instrument, irrespective of any leverage provided within the ETF? Using your example of a 2:1 account, is the Leverage field for a 3:1 ETF always 2, not 6?

Thanks.

I think the product itself is designed to mimic the target leverage (i.e. if the SP500 ticker goes up 10% in a day, the x2 ticker goes up 20%, and the x3 ticker goes up 30%). Your broker will determine your margin requirements beyond that. Especially for these weird products, you need to check the margin requirements.

Thanks @AndrewAMD.

*sigh* So, not only no simple answer, but one must also pry information out of the broker, and trust it as well...

Thanks.

Yes. With IB, leveraged ETFs have special margin requirements that basically compensate their leverage. Some info here: https://ibkr.info/article/1124

Thanks @jcl.

Clarification: It appears from IB's write-up that this/these is/are government/exchange rule/s. And so not IB's sole decision, but all brokers must follow, correct?

Thanks.

Yes. The brokerage also has the right to employ even stricter rules than the exchange rules.

Thanks @AndrewAMD.

Let's assume for the sake of argument that I'm human. Meaning 2 things: lazy, and (even when not lazy) make mistakes. Since Zorro is not set-and-forget, I regularly monitor. Within that framework, for trading stocks, ETFs, etc. is there a better choice amongst:

- Expend the (on-going) effort to research & set each & every Asset at the correct Margin, expect that Results will match Test, and risk mistakes
- Be lazy and pick a Margin value (1, 2, whatever) and just use it for all Assets, accepting that Results will not match Test, and possibly Trading with Capital less than CR for added safety

Thanks.

I have a different lazy option: Set the leveraged ETFs to 1:1, and the ordinary ETFs and stocks to 2:1.

Thanks @AndrewAMD.

Given that I'll sooner or later accumulate some # of mistakes, how bad will the risks and/or results be with leverageds at 2:1 and/or ordinaries at 1:1?

Thanks.