Electives are always better than Observerships but if you cant find them it is always better to have atleast Observerships. Sometimes observerships help a lot but mostly they are not as effective as electives, however they are better than no observerships, so if you find a observership, make full use of the opportunity.

Observerships are far more easier to grab when you are applying from US and meet the concerned physician yourself in person but far more difficult if you are not able to see them while applying. Thats my personal opinion as its easier to convince the physician when you meet him in person as compared to on emails.

Observerships are always free....atleast to the best of my knowledge, its just a sort of private contract between you and physician and usually physicians are courteous enough that they dont ask for money for allowing you to shadow(observe) them... I dont know anyone who asks for any fees/money for observerships...however have heard of few but never known anyone...moreover some companies may offer you observerships with some fees as they establish their contracts with physicians for this and pay them but again I wont recommend them as they are the docs who earn their money this way... and moreover why to pay for something while you can get it for free....

Honestly speaking I wont recommend simple observerships to anyone.... they are not feasible economically, effort and if you are going to US only and only for observership, I believe it to be waste of time, money and effort. I might be wrong as this is my personal opinion.

I would strongly recommend you to look for any research position in US universites as they are quite possible(many of my friends have got them and I have also been offered a few) and if you do well for a few months... you get paid as well...moreover during your research you can request your mentor or any other physician in your research for observerships and usually they are courteous enough not to reject you....moreover they are always free atleast this way....

there is requirement of USMLE steps by some physicians and universities which is there only to make sure that you wont be a dumb person following the physician and asking him silly questions but if you are able to convince him that you wont be a burden on him... I am sure they wont mind to have a brilliant student shadowing them...

If you have planned well, the best time to complete your rotations are while you are still a medical student.Students from the Schulich School of Medicine & Dentistry have numerous opportunities to participate in observerships and electives throughout their four years of undergraduate medical education in communities throughout Southwestern Ontario.Most institutions require that you be in your last year of medical school.

Electives: Any optional ward rotation done... clinical electives in usually final year of medical school in Pakistan and others and in pre-intern year in India... research electives can be done anytime! These includes rotations like radiology, cardiac surgery, chest medicine... that are not compulsory! Mostly US/ UK electives are done to get good reference/ letter for your future job/ training positions.
Observership: Any ward rotation in which you observe/watch the attendings, residents, fellows or other medical students but you are not allowed to touch/examine the patient yourself or participate in any sort of activity, though you can watch everyone doing everything... considered to be a passive form of learning as compared to electives! You can also get a letter/ reference from observerships but generally people consider reference letter from electives experience to be better than reference letter from observerships; though I personally believe a very good observership letter is better than an ordinary electives letter. If you get a chance to chose one out of two... I recommend electives!
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