When it comes to exchange-traded fund (ETF) investing, Canadians have a lot of choices.
Since the creation of the world’s first ETF in 1990 here in Canada, the number of ETFs in the country has grown to almost 1,500 ETFs today. (CIBC, August 2024).
While that represents a lot of choices for investors, it also means there’s a lot to consider, which can be a challenge when your real investment dollars are on the line.
What if there was a better way to navigate and learn about Canada’s ETF ecosystem and potentially get rewarded while doing so?
Global X has been hosting The Biggest Winner, a free-to-enter simulated trading contest since 2012 and over the years, has given away over $150,000 in prize money.
With the 13th edition of this contest beginning on September 16,this blog will give an overview of how this contest works, what’s up for grabs and share some helpful tips for virtual traders. Let’s dive in!
HOW IT WORKS
The Biggest Winner is a simulated ETF trading contest covering all ETFs listed in Canada presented by Global X, in association with National Bank Direct Brokerage and TMX Group.
The competition allows Canadian investors of all experience levels to learn about trading in a risk-free environment while competing for real cash prizes. Participants open a virtual online brokerage account that starts with a balance of $100,000 in fantasy funds in Canadian dollars – no real money is being traded.
They then use these fantasy funds to virtually trade any ETF listed on Canadian exchanges during market trading hours using real-time data. Registration is free with no purchase necessary. The contest runs for six weeks from 9:30 am EST on September 16 through 4:30 pm EST on October 25.
HOW YOU COULD WIN
While all Canadians of the age of majority in their province can compete in the Biggest Winner, the Biggest Winner is the trader that registers the highest investment return over the six-week contest period with prizes for runner-up and third-place contestants. Global X is also awarding six prizes of $1,000 for the best weekly investment return as well. But that’s not all!
Contestants who made three or more trades in the prior week will be entered into a random weekly draw with one lucky trader eligible to win a $100 Amazon gift card, each week.
Through all of its previous editions, The Biggest Winner competitions have hosted approximately 25,000 participants and awarded over $150,000 in cash prizes.
Why would you want to enter The Biggest Winner?
It’s an opportunity for aspiring Canadian investors to learn about trading in a risk-free simulated environment and have fun while doing it. Contestants get to pit their wits – and market smarts – against fellow traders from all across Canada. And the fantasy nature of this competition encourages you to take bigger risks to try and win it all!
TRADING TIPS
So what are some key trading strategies that might help contestants? Here’s how many trades took place over recent The Biggest Winner contests.
Based on the competition’s historical trading data, we’ve seen an average of 25,000 trades per competition. Assuming an average of 2,500 traders per competition, many Canadians make at least 10 trades per competition! The most successful traders tend to actively trade and may make many more.
Trading ETFs is pretty straightforward but there’s more to it than simply placing an order. These trading tips should help you trade ETFs more efficiently.
- USE LIMIT ORDERS
An ETF’s fair value or net asset value (NAV) is tracked throughout the day by a market maker. They ensure that the bid and ask prices for any ETF are close to the NAV through the trading day so that buy and sell orders can be executed efficiently regardless of trading volume.
However, the market-making system is automated and sometimes can experience interruptions where the market maker is not “in” the market to ensure efficient pricing. When this happens, the market maker’s bid and ask prices disappear and the prevailing bid and ask prices at that time are those of other market participants that may not be closely tracking the current NAV.
By using a limit order, you can specify the price for buying or selling ETF units and limit the length of time the order is valid before being cancelled.
- AVOID TRADING IN THE FIRST AND LAST FIVE MINUTES OF THE TRADING DAY
An ETF is a convenient way to buy a diversified basket or portfolio of securities. The price of the ETF is simply the weighted average price of each of the underlying securities. However, when the market opens, it may take a few minutes for some of these underlying securities to begin trading and have their value reflected in the price of the ETF. At the end of the day, the market maker that keeps an ETF’s value in line with its NAV may be out of the market as it is executing its closing transactions.
- TRADE ETFS WHEN THE UNDERLYING MARKET IS OPEN
This is particularly important for executing trades in commodity or currency ETFs. Commodity and currency markets open and close at different times than North American equity markets, which operate from 9:30 a.m. EST to 4:00 p.m. EST. Since ETFs are listed on an equity exchange, they will only trade during market hours even though the underlying commodity or currency market might be closed.
To ensure that you are getting fair pricing to NAV, it is generally best to buy and sell the ETF when the underlying market is open as that is when the market maker can ensure accurate pricing. Consult the ETF’s website for the times that the underlying commodity or currency market is open. This also applies to holidays when a Canadian market might be open and the U.S. market might be closed and the difference in the buying and selling price (known as the “bid/ask spread”) might be wider.
- TAKING ADVANTAGE OF MARKET VOLATILITY
Last year’s Biggest Winner says his key to success was anticipating and taking advantage of market volatility. To achieve his returns, the winning trader rotated in and out of long and short commodity and equity-focused strategies, targeting opportunities to reposition and capture momentum ahead of market reversals.
The winning contestant primarily used leveraged and inverse leveraged ETFs with a focus on natural gas, gold, silver and Bitcoin, taking advantage of volatility through limit buys and sells – allowing the trader to buy and sell at the price they wanted.
THE MOST TRADED ETFS
All ETFs listed in Canada are eligible for trading in The Biggest Winner. However, a quick analysis of prior contests reveals that the most-traded securities have come from Global X’s BetaPro family of leveraged, inverse and inverse leveraged ETFs which provide exposure across a variety of indices, sectors, asset classes and commodities.
Never heard of them? BetaPro ETFs are designed for investors seeking short-term, tactical trading vehicles who are comfortable managing investments with greater risk potential.
You can find an introduction to our BetaPro range here.
Successful traders in prior Biggest Winner contests appear to have traded on overall market volatility with…
HUV seeks to provide investment results, before fees, expenses, distributions, brokerage commissions and other transaction costs, that endeavour to correspond to the performance of the S&P 500 VIX Short-Term Futures Index™. Any U.S. dollar gains or losses as a result of HUV’s investment will be hedged back to the Canadian dollar to the best of its ability.
…as well as movements in the Energy sector with funds including…
HNU seeks daily investment results, before fees, expenses, distributions, brokerage commissions, and other transaction costs, that endeavour to correspond to up to two times (200%) the daily performance of the Horizons Natural Gas Rolling Futures Index.
…action in the Commodities sector with…
HGU seeks daily investment results, before fees, expenses, distributions, brokerage commissions and other transaction costs, that endeavour to correspond to two times (200%) the daily performance of the Solactive Canadian Gold Miners Index.
…and the Cryptocurrency space with…
BITI seeks to provide daily investment results, before fees, expenses, distributions, brokerage commissions and other transaction costs that endeavour to correspond to up to one times (100%) the inverse (opposite) of the daily performance of an index that replicates the returns generated over time through long notional investments in Bitcoin Futures. The current Underlying Index of BITI is the Horizons Bitcoin Front Month Rolling Futures Index (Excess Return). BITI does not seek to achieve its stated investment objective over a period of time greater than one day.
[NOTE: BetaPro Products consist of our Daily Bull and Daily Bear ETFs (the “Leveraged and Inverse Leveraged ETFs”), Inverse ETFs (the “Inverse ETFs”), and our BetaPro S&P 500 VIX Short-Term Futures™ ETF (the “VIX ETF”) and can offer opportunities for enhanced returns or hedging strategies, but it’s essential to understand and accept the associated risks. Leveraged ETFs aim to amplify the returns of an underlying index, which can lead to higher gains, but they also magnify losses in downturns. Similarly, inverse ETFs seek to profit from declines in the underlying index, meaning they can perform inversely to the market, but losses can accumulate quickly if the market moves against expectations. While these strategies will only be used in accordance with the investment objectives and strategies of the BetaPro Products, during certain market conditions they may accelerate the risk that an investment in shares of a BetaPro Product decreases in value. Investors should be aware of and understand their risk tolerance and capacity and conduct their research before investing. An investment in any of the BetaPro Products is not intended as a complete investment program and is appropriate only for investors who have the capacity to absorb a loss of some or all of their investment.]
So there you have it. The Biggest Winner offers the chance to pit your wits – and market smarts – against other traders from coast to coast in a simulated ETF trading contest that’s risk-free. Successful traders get the chance to win actual cash prizes.
Here’s where our prior winners come from. Will we be pinning your location to our map this year?
2023 winner: Michael Pallone, Montreal, QC
2022 winner: James Lindhe, Orleans, ON
2021 winner: Galiaskar Aitkuzhinov, Toronto, ON
2019 winner: John Wayne Trinh, Saint-Leonard, QC
2018 winner: Joel Couture, Levis, QC
2017 winner: Maxwell Carr, Mississauga, ON
2016 winner: Tim Love, Toronto, ON
2015 winner: Daniel Tsang, Calgary, AB
2014 winner: Lanette Lam, Vancouver, BC
2013: Anouchka Lemieux, Montreal, QC
Global X’s contest starts at 9:30 am EST on September 16, 2024, and runs for six weeks, ending at 4:30 pm EST on October 25, 2024. You can register here and sign in here if you have already signed up.
Good luck and may the best trader win!
DISCLAIMERS
Commissions, management fees and expenses all may be associated with an investment in products (the “Global X Funds”) managed by Global X Investments Canada Inc. The Global X Funds are not guaranteed, their value changes frequently and past performance may not be repeated. Certain Global Funds may have exposure to leveraged investment techniques that magnify gains and losses which may result in greater volatility in value and could be subject to aggressive investment risk and price volatility risk. Such risks are described in the prospectus. The prospectus contains important detailed information about the ETF. Please read the relevant prospectus before investing.
The Global X Funds include our BetaPro products (the “BetaPro Products”). The BetaPro Products are alternative mutual funds within the meaning of National Instrument 81-102 Investment Funds and are permitted to use strategies generally prohibited by conventional mutual funds: the ability to invest more than 10% of their net asset value in securities of a single issuer, to employ leverage, and engage in short selling to a greater extent than is permitted in conventional mutual funds. While these strategies will only be used in accordance with the investment objectives and strategies of the BetaPro Products, during certain market conditions they may accelerate the risk that an investment in shares of a BetaPro Product decreases in value. The BetaPro Products consist of our Daily Bull and Daily Bear ETFs (“Leveraged and Inverse Leveraged ETFs”), Inverse ETFs (“Inverse ETFs”), and our BetaPro S&P 500 VIX Short-Term Futures™ ETF (the “VIX ETF”). Included in the Leveraged and Inverse Leveraged ETFs and the Inverse ETFs are the BetaPro Marijuana Companies 2x Daily Bull ETF (“HMJU”) and BetaPro Marijuana Companies Inverse ETF (“HMJI”), which track the North American MOC Marijuana Index (NTR) and North American MOC Marijuana Index (TR), respectively. The Leveraged and Inverse Leveraged ETFs and certain other BetaPro Products use leveraged investment techniques that can magnify gains and losses and may result in greater volatility of returns. These BetaPro Products are subject to leverage risk and may be subject to aggressive investment risk and price volatility risk, among other risks, which are described in their respective prospectuses. Each Leveraged and Inverse Leveraged ETF seeks a return, before fees and expenses, that is either up to or equal to, either 200% or –200% of the performance of a specified underlying index, commodity futures index, or benchmark (the “Target”) for a single day. Each Inverse ETF seeks a return that is –100% of the performance of its Target. Due to the compounding of daily returns a Leveraged and Inverse Leveraged ETF or Inverse ETF’s returns over periods other than one day will likely differ in amount and, particularly in the case of the Leveraged and Inverse Leveraged ETFs, possibly direction from the performance of their respective Target(s) for the same period. For certain Leveraged and Inverse Leveraged ETFs that seek up to 200% or up to or -200% leveraged exposure, the Manager anticipates, under normal market conditions, managing the leverage ratio as close to two times (200%) as practicable however, the Manager may, at its sole discretion, change the leverage ratio based on its assessment of the current market conditions and negotiations with the respective ETF’s counterparties at that time. Hedging costs charged to BetaPro Products reduce the value of the forward price payable to that ETF. Due to the high cost of borrowing the securities of marijuana companies in particular, the hedging costs charged to HMJI are expected to be material and are expected to materially reduce the returns of HMJI to unitholders and materially impair the ability of HMJI to meet its investment objectives. Currently, the manager expects the hedging costs to be charged to HMJI and borne by unitholders will be between 10.00% and 45.00% per annum of the aggregate notional exposure of HMJI’s forward documents. The hedging costs may increase above this range. The manager publishes on its website, the updated monthly fixed hedging cost for HMJI for the upcoming month as negotiated with the counterparty to the forward documents, based on the current market conditions. The VIX ETF, which is a 1x ETF, as described in the prospectus, is a speculative investment tool that is not a conventional investment. The VIX ETF’s Target is highly volatile. As a result, the VIX ETF is not intended as a stand-alone long-term investment. Historically, the VIX ETF’s Target has tended to revert to a historical mean. As a result, the performance of the VIX ETF’s Target is expected to be negative over the longer term and neither the VIX ETF nor its target is expected to have positive long-term performance. BetaPro Inverse Bitcoin ETF (“BITI”) which is an up to -1X ETF as described in the prospectus, is a speculative investment tool that is not a conventional investment. Its Target, an index which replicates exposure to rolling Bitcoin Futures and not the spot price of Bitcoin, is highly volatile. As a result, the ETF is intended as a stand-alone investment. There are inherent risks associated with products linked to crypto-assets, including Bitcoin Futures. While Bitcoin Futures are traded on a regulated exchange and cleared by regulated central counterparties, direct or indirect exposure to the high level of risk of Bitcoin Futures will not be suitable for all types of investors. An investment in any of the BetaPro Products is not intended as a complete investment program and is appropriate only for investors who have the capacity to absorb a loss of some or all of their investment. Please read the full risk disclosure in the prospectus before investing. Investors should monitor their holdings in BetaPro Products and their performance at least as frequently as daily to ensure such investment(s) remain consistent with their investment strategies.
Certain statements may constitute a forward-looking statement, including those identified by the expression “expect” and similar expressions (including grammatical variations thereof). The forward-looking statements are not historical facts but reflect the author’s current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking statements. These forward-looking statements are made as of the date hereof and the authors do not undertake to update any forward-looking statement that is contained herein, whether as a result of new information, future events or otherwise, unless required by applicable law.
This communication is intended for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to purchase investment products (the “Global X Funds”) managed by Global X Investments Canada Inc. and is not, and should not be construed as, investment, tax, legal or accounting advice, and should not be relied upon in that regard. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies. These investments may not be suitable to the circumstances of an investor.
All comments, opinions and views expressed are generally based on information available as of the date of publication and should not be considered as advice to purchase or to sell mentioned securities. Before making any investment decision, please consult your investment advisor or advisors.
All trademarks/service marks are registered by their respective owners. None of the owners thereof or any of their affiliates sponsor, endorse, sell, promote or make any representation regarding the advisability of investing in the Global X ETFs. Complete trademark and service-mark information are available at https://www.GlobalX.ca/legal/Trademarks.
Standard & Poor’s®” and “S&P®” are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”) and have been licensed for use by Global X Investments Canada Inc. (“Global X”). The Global X ETFs are not sponsored, endorsed, sold or promoted by S&P, and S&P makes no representation, warranty or condition regarding the advisability of buying, selling or holding units/shares in the Global X ETFs.
Global X Investments Canada Inc. (“Global X”) is a wholly owned subsidiary of Mirae Asset Global Investments Co., Ltd. (“Mirae Asset”), the Korea-based asset management entity of Mirae Asset Financial Group. Global X is a corporation existing under the laws of Canada and is the manager, investment manager and trustee of the Global X Funds.
Published September 18, 2024.
Categories: Articles, Insights
Topics: Biggest Winner