When assessing exchange-traded funds (ETFs), relative volume is a key indicator of market interest and trading activity. Using the TipRanks ETF Screener, we identified three ETFs with notably higher trading volumes, positioning them as potential buys.
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Relative volume compares an ETF’s current trading activity to its three-month average, highlighting whether it is being actively traded. A surge in relative volume often boosts liquidity, enabling smoother transactions. Moreover, heightened trading activity tends to narrow the bid-ask spread—the difference between what buyers offer and sellers demand. This reduction lowers trading costs, offering investors a distinct advantage.
In summary, ETFs with higher relative volume not only capture market attention but also provide a cost-effective and seamless trading experience. These attributes make such ETFs attractive options for investors seeking both efficiency and potential market opportunities.
Defiance Daily Target 1.5x Short MSTR ETF (SMST)
The Defiance Daily Target 1.5x Short MSTR ETF (SMST) seeks to provide 2x inverse exposure to the daily share price movement of MicroStrategy (MSTR) and was started last year. This ETF is trading at 1.78 times the average volume over the past three months, indicating heightened investor activity. The fund currently has $4.7 million in assets under management (AUM).
This fund could be attracting interest from investors due to the growing interest in crypto, as Bitcoin’s price has jumped by over 100% over the past year. Additionally, MSTR stock that has large cryptocurrency holdings, has skyrocketed by more than 400% over the past year. However, this ETF has declined by more than 90% over the past year.
T-Rex 2X Inverse Tesla Daily Target ETF (TSLZ)
The T-Rex 2X Inverse Tesla Daily Target ETF (TSLZ) makes another appearance on the best ETFs list this week, trading at 1.72 times the average volume over the past three months. This rise in investor interest could be due to Tesla (TSLA) being perceived as benefiting from the U.S. elections’ results, with Musk firmly backing President-elect Trump. Over the past year, TSLZ has fallen by more than 85%.
Direxion Daily Financial Bear 3X Shares (FAZ)
The Direxion Daily Financial Bear 3X Shares (FAZ) ETF delivers 3x inverse exposure to the Russell 1000 Financial Services Index, making it ideal for investors with a bearish short-term view of financial markets. While FAZ can be a strategic tool for experienced investors targeting financial sector downturns, it’s unsuitable for those with low risk tolerance.
This ETF is trading at 1.57 times the average volume over the past three months and currently has $91.9 millions of AUM. Over the past year, FAZ has declined by more than 45%.
Key Takeaway
The Defiance Daily Target 1.5x Short MSTR ETF (SMST), T-Rex 2X Inverse Tesla ETF (TSLZ), and Direxion Daily Financial Bear 3X Shares ETF (FAZ) are seeing a surge in trading volumes, reflecting strong investor interest. For SMST and TSLZ ETFs, both down by more than 90% and 85%, respectively, their inverse exposure to cryptocurrency and Tesla continues to attract attention. Furthermore, the Direxion Daily Financial Bear 3X Shares (FAZ) ETF has declined by more than 45% over the past year.
This appeal lies in their potential to profit from bearish sentiment toward these assets, making them a focus for tactical investors.
