First Time Selling ETF - how to do?

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MekongTrader
Posts: 357
Joined: Wed Jul 16, 2008 2:33 am
Location: On the banks of the Mekong

First Time Selling ETF - how to do?

Post by MekongTrader » Wed Dec 05, 2012 2:33 am

Hi all,
I presently hold VEU (FTSE all World Ex US) and VSS (FTSE all World Small cap Ex US) for my int'l stock exposure. I want to simplify and go all into VXUS (Total int'l), one fund for int'l exposure only.

My question:
I have always bought ETFs over the years but never sold.

How exactly should I be doing that?

(I don't want to tinker around trying to time the market in one trading day - just get it done in the shortest possible time)

.At what time (of the trading day) should I be doing this? Is 1hr after market opening ok or should I do it later in the trading day? (I'm in Asia and don't want to stay up too late...)

.Should I give it just 2 shots (1 for VEU and 1 for VSS) when selling, or do it in several smaller portions (don't think this would make sense since commission cost adds up)?

.Then when buying VXUS, anyhing I need to look out for? Just one shot and all in?

I heard about spreads, volume, etc and of course I want to minimize any losses that could occur. It's a pretty big amount of $.

When making the trades on my brokerage online platform:
What kind of 'Order type' do I choose when selling? 'Sell'?
What kind of 'Price type' do I choose when selling? 'Market'?
What kind of 'Term' do I choose when selling?

How about buying VXUS? Which options should I choose?

Thank you very much for your input and help

MT

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curiouskitty
Posts: 185
Joined: Sun Oct 18, 2009 1:40 am

Re: First Time Selling ETF - how to do?

Post by curiouskitty » Wed Dec 05, 2012 3:08 am

I would put a limit order at the price you're willing to sell at (if you don't care, perhaps a few cents above the current price) and then I would go to bed and not watch the market. Hopefully you'll get an email confirming the transaction went through sometime tomorrow :) Many people don't trade at the very beginning or end of the day because of volumes/spreads but with a limit order you don't have to care. If you do happen to be awake during the trading day, you'll have a better ability to pick a price in the right range as sometimes the market can jump up or down a bit at the open based on news that happened overnight.

You don't want to use a market order because if we have, for example, a flash crash and the price drops 50% for 5 minutes then you might happen to sell at that time. With a limit order you can just name a price and ensure that no one will take advantage of you in that sense. If you're really impatient to get the ETF sold ASAP, then you can just set the limit order a bit lower then the last trade price or at/below the bid price to make it very likely it will execute immediately.

If it's significant money, then you can do this a few times over a period of days/weeks/months to smooth out the price fluctuations.

In summary, "sell" with a "limit order" around the current price.

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Jerilynn
Posts: 1929
Joined: Tue Sep 06, 2011 12:49 pm
Location: USA, Earth

Re: First Time Selling ETF - how to do?

Post by Jerilynn » Wed Dec 05, 2012 3:20 am

MekongTrader wrote:Hi all,
I presently hold VEU (FTSE all World Ex US) and VSS (FTSE all World Small cap Ex US) for my int'l stock exposure. I want to simplify and go all into VXUS (Total int'l), one fund for int'l exposure only.

My question:
I have always bought ETFs over the years but never sold.

How exactly should I be doing that?

(I don't want to tinker around trying to time the market in one trading day - just get it done in the shortest possible time)

.At what time (of the trading day) should I be doing this? Is 1hr after market opening ok or should I do it later in the trading day? (I'm in Asia and don't want to stay up too late...)

.Should I give it just 2 shots (1 for VEU and 1 for VSS) when selling, or do it in several smaller portions (don't think this would make sense since commission cost adds up)?

.Then when buying VXUS, anyhing I need to look out for? Just one shot and all in?

I heard about spreads, volume, etc and of course I want to minimize any losses that could occur. It's a pretty big amount of $.

When making the trades on my brokerage online platform:
What kind of 'Order type' do I choose when selling? 'Sell'?
What kind of 'Price type' do I choose when selling? 'Market'?
What kind of 'Term' do I choose when selling?

How about buying VXUS? Which options should I choose?

Thank you very much for your input and help

MT
Don't buy/sell at the very beginning or very end of the day, sometimes the prices and spreads are kinda funky. With those 3 funds, the liquidity should be such that you can sell the VEU, sell the VSS and then buy the VXUS all within 5 minutes. I guess it's possible to have a 'flash crash', but I think that's unlikely and I don't see any benefit of using limit orders. If you use limit orders there is a chance that 1 or 2 will execute and the others won't because of market movement which is a pain and then you end up chasing the market trying to fill the last order.

As a side note, I also own VSS and I will never sell it. (the spread)
Cordially, Jeri . . . 100% all natural asset allocation. (no supernatural methods used)

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