Understanding ETFs

ETFs (Exchange Traded Funds) track an index, a commodity or a basket of assets like an index fund, but trade like a stock on an exchange.
By owning an ETF, you get the diversification of an index fund as well as the ability to sell short, buy on margin and purchase as little as one share. Another advantage is that the expense ratios for most ETFs are lower than those of the average mutual fund. When buying and selling ETFs, you have to pay the same commission to your broker that you'd pay on any regular order.
One world of caution: avoid "Actively Managed" ETFs, they suffer from the same drawbacks as actively managed mutual funds.