Breaking News

ETF Trading Guide For Beginner 2023

ETF Trading Guide For Beginner 2022

Financial trading is a concept not known by every person even though they trade in it knowingly or unknowingly. Even when you get groceries from a supermarket, it is a type of transaction that counts for trading. But it is a matter of realization. For anyone who gets it and starts indulging in the game of commerce, success is not far behind them. ETF Trading 2023 tutorial is on a mission to widespread the message among classes and the masses.

What is ETF Trading?

There are several ways of entering the investment industry. Not everyone is experienced enough to take risks and game out options that could lead them to quick money.


When building a savings or retirement strategy, there are many different financial instruments to choose from – such as mutual funds and ETFs – which have different functions in an investor’s portfolio.

Whether an individual is saving for a car, a house, college tuition, or retirement itself is immaterial when it comes down to picking out specific tools; they should consider what their ultimate goal is so they can pick which route will help them get there faster. This is where this white paper comes into play. Read up!

ETF Assets Held

The exchange-traded fund holds various assets and instruments like stocks, forex, commodities, cryptocurrencies, bonds, etc. There is an arbitrage mechanism that gets channelized in it. People can trade close to the net asset value, which helps in enlarging profits. However, there may be some instances that can cause deviations in the market.

ETFs are Index Funds

Similar to the bond market index or stock market index, ETFs command equal securities in equivalent proportions. Precisely, you can count most exchange-traded funds as index funds.

All major stock exchanges list ETFs, and a trader can buy and sell them whenever there’s a need.

Cost of ETFs Price

The volatility or frequency in the prices of shares for an ETF depends on the rate of underlying assets or instruments in the resources pool. They get produced via creation blocks and get traded in the stock market.

If one of the shares or the price of one stock does well or surges, it has a positive effect on ETFs and the trader makes profits. Also, vice-versa is true too. Hence, when prices drop, you can view ETFs facing the ire of the market.

Dividend of ETFs

You know, similar to the share market, you get an opportunity to make money through dividends. However, the value of a dividend depends completely on the type of asset management a shareholder does. Besides, the ETF company’s performance is also responsible for it.

Passively or actively, a portfolio manager has to comply with the norms and regulations of regulated authorities and exchanges.

Before advising, they have to check how the market performs and various other circumstances that may affect their preparations.

Passively Managed ETFs

For trading in a passive manner, a trader or the service provider has to follow certain indices and see how they perform. After getting a clue, things get on the pedestal of profits. Here investing happens only in those stocks or companies whose prices are on the rise. However, it can be risky, but one has to ensure several aspects like stop-loss and limit orders while indulging in them.

Actively Managed ETFs

In it, the portfolio manager accesses the stock market situation or any other instrument or asset before allowing the client to invest. Calculated risks are generally advised by investing in companies that exhibit great potential for growth and gains.

If you compare ETFs to mutual funds, then the former clearly has the edge over the other.

Broadens the limit of Investment

If you invest only in a company’s share, you can neither grow as an investor, nor you would be where you want to be. Moreover, there is the involvement of high perils, because if the market moves red, and your company follows the trend, a loss is lurking at you.


Additionally, you get stuck as an investor, and there is nowhere you can look around when losses strike. However, in ETFs, you can spread your finances across various equities. It scatters over different dimensions; hence, the risk gets diluted to an extent. Besides, if you lose money on one, there’s a probability that you gain on the other.

In an ETF pool of resources, if one asset does not perform as per the expectations, rests are there to compensate with a phenomenal success rate.

Benefits of ETF Trading

  • The expenses, while you trade in an ETF, are lesser. In mutual funds, you may have to shell out money or pay charges on investing or exiting and entering a set position. There are management fees and other curricular costs, which add up to your transactions. So, the overall expense ratio is high here.
  • However, the expense ratio of ETFs trading is low, as they get traded like shares on a stock exchange.
  • Mutual funds depend highly on NAV, and their performance, and one can determine their prices when the last session ends. There is no compulsion attached to ETFs.You can observe changes instantly and decide when and what amount to purchase or sell. So, there is the flexibility of choosing and expanding your horizon to increase chances for better profits.
  • ETFs are mostly tax-friendly, and many countries offer relaxation over their liabilities. However, you can be subjected to capital gains for holding exchange-traded funds, but the fee levied on them is relatively low.
  • EFTs get managed passively, so traders wait and see when the market is feasible for them for trading. There are no compulsions and requirements for entering or exiting the position at the day’s end.
  • Investment in ETFs happens in growth stocks or blue-chip securities that are not vulnerable to hefty losses when the market takes a dip.
  • The ETF market does not boast of any embellishments.


Although ETFs are riding on the nerves of almost everyone, from novice to experienced traders, there are some drawbacks that one shouldn’t ignore.

 Condition of Stock Markets

As ETF depends on the underlying value of securities. So, when the stock market jumps, the prices of exchange-traded funds would replicate it, and likewise when it plunges deep. Unlike government bonds, there is no stability available to traders. They have to depend on the performance of shares.

Brokerage Fees

ETFs copy ways of transactions from shares. Hence, when you buy or sell them, some portion of the commission or fee gets charged along with trades. However, if you are trading with brokers like ROinvesting, Capitalix, and InvestFW, then the cost incurred by you can become lesser.

Charges here are reasonable, and services are optimized for users. There are some other brokers that you’ll have to search for as per the requirement.

Diversification of Funds

Diversified funds may look great for result-oriented and worthwhile goals, but not everything is hunky-dory. There are several stocks and companies which have amazing potential for growth, but due to the passive investment policy, they get overlooked. Therefore, people miss chances of earning there.

Tracking Error

Technical discrepancies can create issues while tracking the market sometimes. However, most of the time it tracks trades exceedingly well.

Liquidity Issue

There are some ETFs that get traded thinly. They come with a wide ask/bid spreads. That essentially means that a trader would be purchasing at the high price of the spread and exiting at the lower.

Different Types of ETFs

These diversified assets and instruments render little joy to investments to market players.

Different Types of ETFs

The financial market is wide open to offer benefits. Here are some:-

Commodity ETFs

These ETFs direct the funds to invest in sundry commodities, including precious metals like gold, silver, and platinum. There are agrarian products, such as wheat, corn, cotton, etc. for trading. Moving further, there are energy fuels like oil, natural gas, hydrocarbons, and other assets for investment. The structure of the Commodity ETFs looks like exchange-traded grantor trusts. In a fixed portfolio, you get a direct interest.

Forex ETFs

In a basket of currencies, you can invest or sell them in the forex market when prices hit low or high. Traders can take advantage of a change in the forex exchange spot. Even ordinary or newbie traders can earn benefits in this trading.

Inverse ETFs

Various derivatives come together to construct inverse ETFs, which help in fetching benefits even when the market is down or takes a nosedive. It profits from the down-run value of the underlying benchmark.

Leveraged ETFs

The returns in leveraged exchange-traded funds are an attempt to draw the multiplication of the expected profits on an index. Experts market it as bear or bull funds.

Thematic ETFs

It eyes on societal trends which are generally longer terms. Such trending includes the market’s triggering through climate change, disruptive technologies, and changes in traders’ behaviour.

ETF Trading List

Here’s the list of best exchanges and their volumes. Select one of the markets or exchanges that suits your plans and agenda

Name AUM Average Volume Symbols


$323,681,000.00 71,662,086 SPY
ProShares UltraPro Short QQQ $1,398,160.00 62,754,887 SQQQ
Financial Select Sector SPDR Fund $24,145,400.00 56,606,117 XLF
iShares MSCI Emerging Markets ETF $27,546,900.00 44,197,813 EEM
ProShares Ultra VIX Short-Term Futures $1,411,920.00 39,146,016 UVXY
Invesco QQQ $149,662,000.00 37,415,434 QQQ
S&P 500 VIX Short-Term Futures ETN – iPath Series B $903,360.00 35,743,695 VXX
Energy Select Sector SPDR Fund $13,426,800.00 33,583,215 XLE
S&P 500 Bear 3X Shares – Direxion Daily $563,212.00 33,488,395 SPXS
ProShares UltraPro QQQ $9,413,080.00 28,571,756 TQQQ
iShares iBoxx $ High Yield Corporate Bond ETF $24,574,300.00 28,258,018 HYG
iShares Silver Trust $14,045,100.00 26,765,477 SLV
iShares MSCI Brazil ETF $6,476,950.00 25,845,383 EWZ
iShares Russell 2000 ETF $59,298,200.00 25,606,742 IWM
ProShares UltraPro Short S&P 500 $687,371.00 23,915,486 SPXU
VanEck Vectors Gold Miners ETF $16,338,800.00 23,271,947 GDX
iShares MSCI EAFE ETF $51,859,000.00 22,014,518 EFA
iShares Gold Trust $31,535,800.00 19,998,568 IAU
Direxion Daily Small Cap Bear 3X Shares $395,045.00 19,537,102 TZA
iShares China Large-Cap ETF $4,018,670.00 15,127,166 FXI
iShares Core MSCI Emerging Markets ETF $66,853,900.00 12,642,802 IEMG
iShares iBoxx $ Investment Grade Corporate Bond ETF $54,493,600.00 12,350,248 LQD
ProShares UltraShort S&P 500 $797,478.00 11,939,645 SDS
Utilities Select Sector SPDR Fund $11,891,900.00 11,914,345 XLU
Industrial Select Sector SPDR Fund $16,066,500.00 11,081,286 XLI
Vanguard FTSE Emerging Markets ETF $69,294,500.00 10,424,203 VWO
ProShares Short S&P 500 $1,897,300.00 10,413,398 SH
iShares 20+ Year Treasury Bond ETF $18,938,800.00 10,147,531 TLT
ProShares UltraPro Short Dow30 $508,121.00 10,054,337 SDOW
Direxion Daily Small Cap Bull 3X Shares $1,620,310.00 10,000,617 TNA
ProShares UltraShort QQQ $229,603.00 9,603,137 QID
SPDR S&P Regional Banking ETF $1,958,660.00 9,095,492 KRE

SPDR Gold Trust

$70,364,400.00 9,042,481 GLD
Consumer Staples Select Sector SPDR Fund $13,335,700.00 8,631,400 XLP
Health Care Select Sector SPDR Fund $25,056,600.00 8,449,672 XLV
Technology Select Sector SPDR Fund $37,406,000.00 8,403,583 XLK
iShares Core MSCI EAFE ETF $82,642,800.00 8,249,171 IEFA
SPDR S&P Oil & Gas Exploration & Production ETF $2,334,760.00 8,189,271 XOP
Vanguard FTSE Developed Markets ETF $86,072,300.00 8,072,258 VEA
VanEck Vectors Junior Gold Miners ETF $6,196,570.00 7,769,849 GDXJ
Direxion Daily S&P 500 Bull 3X Shares $1,641,430.00 7,243,989 SPXL
SPDR Barclays High Yield Bond ETF $12,569,300.00 7,033,382 JNK
Invesco Senior Loan ETF $4,712,880.00 6,612,225 BKLN

iShares MSCI Japan ETF

$13,083,600.00 6,566,014 EWJ
ProShares UltraPro Short Russell2000 $103,761.00 6,231,128 SRTY
Materials Select Sector SPDR ETF $5,167,450.00 6,161,905 XLB
Direxion Daily Junior Gold Miners Index Bear 2X Shares $79,319.20 6,014,705 JDST
iShares U.S. Real Estate ETF $5,328,630.00 5,943,358 IYR
iShares MSCI Germany ETF $2,616,470.00 5,647,412 EWG
U.S. Global Jets ETF $2,908,600.00 5,633,242 JETS
iShares MSCI Hong Kong ETF $1,419,330.00 5,467,017 EWH
iShares Core U.S. Aggregate Bond ETF $84,686,800.00 5,453,246 AGG
iShares 7-10 Year Treasury Bond ETF $14,799,600.00 5,429,214 IEF
iShares U.S. Treasury Bond ETF $14,536,800.00 5,385,805 GOVT
iShares Preferred and Income Securities ETF $19,167,100.00 5,384,234 PFF
United States Oil Fund $3,699,800.00 5,102,059 USO
SPDR Barclays Capital Short Term High Yield Bond ETF $3,683,290.00 5,074,629 SJNK
ProShares UltraPro S&P 500 $1,764,730.00 4,999,222 UPRO
iShares MSCI EMU ETF $5,048,100.00 4,933,695 EZU
Direxion Daily Energy Bull 2X Shares $440,104.00 4,902,536 ERX
VanEck Vectors Russia ETF $1,595,340.00 4,868,302 RSX
Vanguard Total Bond Market ETF $67,496,100.00 4,822,004 BND
United States Natural Gas Fund $410,481.00 4,717,080 UNG
ProShares VIX Short-Term Futures ETF $325,559.00 4,509,579 VIXY
iShares Global Clean Energy ETF $4,491,240.00 4,462,911 ICLN
ProShares Ultra Bloomberg Crude Oil $898,178.00 4,452,629 UCO

ProShares Short QQQ

$539,586.00 4,410,709 PSQ
Direxion Daily Gold Miners Bear 2X Shares $93,455.10 4,378,718 DUST
iShares Core S&P Small-Cap ETF $56,124,900.00 4,355,381 IJR
iShares J.P. Morgan USD Emerging Markets Bond ETF $19,082,700.00 4,347,080 EMB
SPDR S&P Biotech ETF $7,220,590.00 4,334,504 XBI
Vanguard Real Estate Index Fund $30,655,600.00 4,161,667 VNQ
iShares MSCI India ETF $4,240,470.00 4,134,225 INDA
Vanguard FTSE Europe ETF $14,260,200.00 4,127,188 VGK
iShares MSCI United Kingdom ETF $2,851,170.00 4,109,880 EWU
iShares MSCI Taiwan ETF $5,276,490.00 4,000,926 EWT
iShares MSCI South Korea ETF $6,811,960.00 3,995,666 EWY
iShares Core S&P 500 ETF $234,135,000.00 3,974,786 IVV
Direxion Daily Financial Bear 3X Shares $202,663.00 3,908,143 FAZ
Real Estate Select Sector SPDR Fund $2,187,570.00 3,901,591 XLRE
iShares MSCI ACWI ETF $14,018,800.00 3,876,097 ACWI
iShares MSCI China ETF $6,410,960.00 3,762,906 MCHI
ProShares UltraShort Bloomberg Crude Oil $102,502.00 3,613,672 SCO
Vanguard Total Stock Market ETF $199,629,000.00 3,514,771 VTI
SPDR Dow Jones Industrial Average ETF $24,094,700.00 3,491,851 DIA
Direxion Daily Aerospace & Defense Bull 3X Shares $311,365.00 3,479,351 DFEN
Direxion Daily S&P Oil & Gas Exploration & Production Bull 2x Shares $521,997.00 3,454,968 GUSH
SPDR S&P Retail ETF $657,285.00 3,370,362 XRT
Alerian MLP ETF $4,276,750.00 3,361,971 AMLP
iShares MSCI-Australia ETF $1,755,470.00 3,340,786 EWA

iShares U.S. Home Construction ETF

$2,096,800.00 3,298,345 ITB
ARK Innovation ETF $19,108,800.00 3,295,615 ARKK
Xtrackers Harvest CSI 300 China A-Shares Fund $2,336,890.00 3,274,874 ASHR
SPDR S&P Bank ETF $2,557,250.00 3,237,918 KBE
iShares Edge MSCI Min Vol USA ETF $32,990,100.00 3,203,380 USMV
Consumer Discretionary Select Sector SPDR Fund $18,176,700.00 3,193,858 XLY
Invesco Preferred ETF $6,987,440.00 3,181,815 PGX
Communication Services Select Sector SPDR Fund $11,868,700.00 3,157,874 XLC
Vanguard Total International Stock ETF $37,411,500.00 3,128,480 VXUS
SPDR EURO STOXX 50 ETF $1,870,610.00 3,098,112 FEZ

Choose any of the markets and apply your funds there. As per the recommendation, it is better to start with those with higher volumes.


In the above article, we have discussed the advantages of ETF trading, the different types of ETFs, and the risks associated with them. We have also covered the advantages of ETF trading over other investment products. We hope that this article will be beneficial to you, so feel free to share it with your friends and family on social media.

Emma Hoxha, a self-taught forex trader and author from the US, inspires others with her journey in the financial markets. Through dedication and self-education, she has developed a deep understanding of forex trading. Emma shares her expertise through insightful articles and books, empowering individuals to take control of their financial futures. As an active participant in the trading community, she provides guidance and support to aspiring traders, demonstrating that success is attainable through passion and perseverance.

Trading View

Top Brokers


Latest Articles