Buying and selling an ETF is pretty straightforward. However, ETF transactions aren't quite as simple as putting in a buy or sell order. Following these three trading tips should allow you to trade ETFs more efficiently and avoid some common trading problems.

1. Always use a limit order

An ETF's fair value or net asset value (NAV) is tracked throughout the day by a market maker. The market maker's function is to ensure that the bid and ask prices for the ETF constantly tracks closely to the NAV throughout 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 units/shares and limit the length of time the order is valid before being cancelled.

TIP - consult the ETF provider's website to determine the previous day's closing NAV on the ETF you are interested in. This will provide you with a good benchmark as to where the ETF's NAV should be and where to put in your limit order. If you have access to level 2 depth of market quotes, look for the bid and the offer where there is the most amount of "size" quoted, and place your limit order there.

2. 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 own closing transactions.

3. Only execute ETF trades when the underlying market is open

This is particularly important when executing trades in an ETF that tracks a commodity or currency. Commodity and currency markets open and close at different times than North American equity markets which are open from 9:30 a.m. EST – 4:00 p.m. EST. Because ETFs are listed on an equity exchange, it will trade during these times, even though the underlying commodity or currency market could be closed. In order 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's when the market maker can ensure accurate pricing. Consult the ETF provider'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.

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Horizons ETFs is a Member of Mirae Asset Global Investments. Commissions, management fees and expenses all may be associated with an investment in exchange traded products managed by Horizons ETFs Management (Canada) Inc. (the "Horizons Exchange Traded Products"). The Horizons Exchange Traded Products are not guaranteed, their values change frequently and past performance may not be repeated. The prospectus contains important detailed information about the Horizons Exchange Traded Products. Please read the relevant prospectus before investing.

The Horizons Exchange Traded Products include our BetaPro Products which consist of our 2x Daily Bull and 2x Daily Bear ETFs ("2x Daily ETFs"), Inverse ETFs ("Inverse ETFs") and our VIX ETF (defined below). The 2x Daily 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, which, where applicable, are described in their respective prospectuses. Each 2x Daily ETF seeks a return, before fees and expenses, that is either 200% or -200% of the performance of a specified underlying index, commodity or benchmark (the "Target") for a single day. Each Inverse ETF seeks a return that is -100% of the performance of a Target. Due to the compounding of daily returns, a 2x Daily ETF's or Inverse ETF's returns over periods other than one day will likely differ in amount and, for the 2x Daily ETFs, possibly direction from the performance of their respective Target(s) for the same period. The BetaPro Product whose Target is the S&P 500 VIX Short-Term Futures Index™ (the "VIX ETF"), which is a (1x) VIX ETF, as described in the prospectus, is a speculative investment tool that is not a conventional investment. The VIX ETFs' Target is highly volatile. As a result, the VIX ETF is not generally viewed as stand-alone long-term investment. Historically, the VIX ETFs' Target has tended to revert to a historical mean. As a result, the performance of the VIX ETFs' 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. Investors should monitor their holdings, as frequently as daily, to ensure that they remain consistent with their investment strategies.

*The indicated rates of return are the historical annual compounded total returns including changes in per unit value and reinvestment of all dividends or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. The rates of return shown in the table are not intended to reflect future values of the ETF or returns on investment in the ETF. Only the returns for periods of one year or greater are annualized returns.