The 7 Best ETFs For Day Trading

Intraday traders try to make a profit by opening and closing trading positions several times a day. They usually close all their open positions at the end of the day and do not carry them over to the next day. In addition to stocks, exchange-traded funds (ETFs) have become another instrument of choice for day trading foreign exchange markets today. They offer the diversification of a mutual fund, high liquidity, and real-time stock trading, as well as low transaction costs. Depending on the admission criteria and financial regulations, some ETFs may also benefit from tax advantages. This article takes a look at the best ETFs suitable for intraday trading.



Criteria For Selection

Intraday trading involves buying and selling positions quickly, trying to make small profits by trading large volumes of multiple transactions. ETFs suitable for intraday trading must have a high level of liquidity to allow easy trading at fair prices. The transaction costs associated with ETF trading are expected to be low, as frequent transactions result in high transaction costs that consume the existing profit potential. Furthermore, the bid and ask spread must also be taken into account when quoting prices for forex trading platforms in India. The bid-ask spread is the difference between the bid and asks prices charged by market participants who trade the particular security. A tighter bid-ask spread indicates fair prices and greater liquidity. Most ETFs that meet these three criteria are based on larger markets (such as those based on popular indices like the Standard & Poor's 500 Index or larger markets in general). Similarly, others such as leveraged ETFs can offer high exposure (two to three times the underlying asset), but they typically lack high liquidity and can lead to high expense ratios foreign exchange market today. These ETFs may not meet the daily trading criteria and will not be considered for inclusion in the daily trading list.

The Top ETFs for Day Trading

1Vanguard S&P 500 ETF  - VOO tracks the popular S&P 500 index, which represents the 500 largest US companies across various industries. This ETF invests at an index-like ratio in stocks included in the S&P 500 index. It has successfully tracked the performance of the index with minimal tracking error. With an average daily trading volume of 4.6 million shares, VOO has one of the lowest expense ratios of just 0.03%, making it a favorite among daily traders. Vanguard S&P 500 ETF

2IShares Core S&P 500 ETF (IVV) and SPDR S&P 500 ETF Trust (SPY): IVV and SPY work exactly like the VOO ETF mentioned above. The only difference is that SPY has a slightly higher expense ratio of 0.09%. IVV has the same expense ratio as VOO: 0.03%. Additionally, with an average daily trading volume of 88.6 million shares, SPY offers significantly higher liquidity.

            


3Vanguard Total Stock Market ETF (VTI): VTI tracks and investigates the performance of the US CRSP, replicating the total market index. This index includes large, medium, small, and microcap stocks that are regularly traded on the NYSE and NASDAQ. This ETF allows a trader to bet on a larger total market that covers a wider range of stocks in multiple market capitalization sectors best broker in India for forex With an expense ratio of just 0.03% and an average daily trading volume of 4.3 million shares, VTI is an excellent choice for day traders.

4Schwab the United States Broad Market ETF (SCHB): Another ETF based on the general market, is the Dow Jones U.S. Broad Market Index. The index includes the 2,500 largest publicly traded companies in the United States. This ETF has an average daily trading volume of around 500,000 shares and comes with a low expense ratio of 0.03% 0.67.

5IShares Treasury Floating Rate Bond ETF (TFLO) - Intraday traders interested in a bond ETF will find TFLO a good affordable option. This fund seeks to match the performance of the Barclays U.S. Index. Replicate the Treasury Floating Rate Index. This ETF successfully tracked the performance of the benchmark index with very low tracking error. It has an expense ratio of 0.15%, but offers a fee waiver of the same amount, making the effective expense ratio zero.

6IShares 20+ Year Treasury ETF (TLT): TLT is another bond ETF that provides long-term exposure to US Treasuries by tracking the performance of the US ICE. Treasury index over 20 years allows it. It offers high liquidity with an average of 16 million ETF shares that change hands every day. It accurately reflects the performance of the benchmark index. However, it has a comparatively higher expense ratio of 0.15% .910

7Schwab US TIPS ETF (SCHP): Concerned about inflation or do you want to profit from trading inflation-linked securities? SCHP offers a perfect fit. It is the performance of the Bloomberg Barclays US Treasury Inflation-Linked Securities Bond Index (Series L), a market value-weighted index of inflation-linked US government bonds with a residual maturity of at least one year. With an average of around 2.2 million shares traded daily and an expense ratio of just 0.05%, SCHP is ideal for day traders.

The Bottom Line

Day trading carries a high level of risk as most day traders take leveraged positions based on margins. Margin-based leverage allows for greater exposure with low trading capital. Therefore, it is essential to reduce the associated transaction costs to compensate for occasional losses and maintain high and realistic profits. Choosing the right ETFs using the above criteria can allow a day trader to make higher profits.

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