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5 Top ETFs for Day Traders

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Day traders love ETFs.

Why?

Because ETFs allow traders to get market exposure fast with maximum liquidity. 

It’s true, you can’t buy the S&P 500 or the Nasdaq

But you CAN buy shares of ETFs that track the performance of the major indexes. 

And there’s even some that track the Treasury bond market.

So here are 5 top ETFs for day traders:

Invesco QQQ Trust Series I (QQQ)

The Invesco QQQ Trust Series I (QQQ) – often referred to as just “The Qs” – tracks the performance of the Nasdaq 100.

That means this ETF has a large exposure to big tech stocks like Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), and Meta (FB). 

The fund was launched by Invesco Capital Management in 1999.

QQQ has an expense ratio of 0.20% and an average trading volume of more than 75 million shares.

At writing, the fund had more than $180 billion in net assets.

SPDR S&P 500 ETF Trust (SPY)

The SPDR S&P 500 ETF Trust (SPY) is the largest ETF in the world and it tracks the performance of the S&P 500

The SPY was introduced by State Streets Global Advisors in January 1993 and was the first ETF ever listed in the U.S.

The fund has an expense ratio of 0.09% and nearly $400 billion in net assets, at writing.

SPY is extremely popular, with an average daily trading volume of more than 110 million shares.

iShares 20+ Year Treasury Bond ETF (TLT)

The iShares 20+ Year Treasury Bond ETF (TLT) tracks the performance of an index of U.S. Treasury bonds with remaining maturities of 20 years or more.

This is a way for traders to expose themselves to that type of investment without having to actually buy bonds. 

When Treasury yields rise, the stock market typically falls. 

Investing in a Treasury-linked ETF can be a way to make money in the market when that scenario is playing out. 

TLT has an expense ratio of 0.15% with over $16 billion in net assets, at writing.

The fund has an average trading volume of more than 20 million shares per day.

ProShares UltraPro S&P 500 ETF (UPRO)

The ProShares UltraPro S&P 500 ETF (UPRO) is a leveraged fund that tracks the performance of the S&P 500.

This fund is 3x leveraged, meaning it aims for returns or losses 3x the performance of the S&P in a session.

If the S&P rose 2% in a single-session, UPRO would rise roughly 6%. 

But it’s the same for a loss. 

If the S&P 500 lost 2% in a single-session, UPRO would fall roughly 6%.

The fund was created in 2009 and had nearly $3 billion in net assets, at writing. 

UPRO has a high expense ratio at 0.91% and average trading volume of 12.5 million shares per day.

Because this fund has a goal of tracking the S&P 500’s performance on a daily basis, it is not considered a long-term investment. 

The amount of index exposure, AKA how many assets are held by the fund, changes every day in order to maintain the 3x leverage ratio.

Direxion Daily Small Cap Bear 3x Shares (TZA)

The Direxion Daily Small Cap Bear 3x Shares (TZA) tracks the Russell 2000.

This is an inverse leveraged ETF, which means it moves in the opposite direction of the RUSS 2K times 3.

Buying an inverse ETF allows traders to profit from a falling market without having to short any stocks. 

If the Russell 2000 were to fall 1% in a session, the TZA ETF would hypothetically rise 3%. 

The fund has an expense ratio of 0.94% and more than $359 million in net assets, at writing. 

It has a daily trading volume of more than 21 million shares.

If you’re looking for more sector-specific ETFs to trade instead, check out this post to learn about the 4 Top FinTech ETFs to watch!

 

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