When looking at exchange-traded funds (ETFs), relative volume stands out as a vital metric for gauging market interest and trading activity. Using the TipRanks ETF Screener, we uncovered three ETFs with significantly higher trading volumes, making them compelling buys for investors.
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Relative volume measures an ETF’s current trading activity against its three-month average, revealing whether it is being actively traded. A notable increase in relative volume often enhances liquidity, ensuring smoother transactions and easier entry or exit from positions.
Furthermore, greater trading activity narrows the bid-ask spread—the gap between the price buyers are willing to pay and what sellers are asking. This reduction translates into lower trading costs, offering a clear advantage to investors.
In summary, ETFs with higher relative volume not only draw market attention but also provide a cost-efficient and seamless trading experience. These features make such ETFs appealing for investors seeking both efficiency and potential opportunities in the market.
2x Long VIX Futures ETF (UVIX)
The 2x Long Vix Futures ETF (UVIX) tracks an index that provides twice daily leveraged exposure to a portfolio comprising first- and second-month VIX futures positions with a weighted average maturity of one month. This ETF is trading at 2.02 times the average volume over the past three months and currently has $202.1 million in AUM. Over the past year, UVIX has declined by more than 70%.
ProShares UltraShort S&P500 (SDS)
The ProShares UltraShort S&P500 (SDS) provides 2x inverse exposure to a market cap-weighted index of 500 large and mid-cap U.S. firms selected by the S&P Committee. This ETF is trading at 1.79 times the average volume over the past three months and currently has $401.2 million in AUM. Over the past year, SDS has declined by more than 20%.
ProShares UltraPro Short QQQ (SQQQ)
The ProShares UltraPro Short QQQ (SQQQ) provides provides (-3x) inverse exposure to a modified market-cap-weighted index of 100 of the largest non-financial firms listed on the NASDAQ. This ETF is trading at 1.75 times the average volume over the past three months and currently has $2 billions of AUM. Over the past year, SQQQ has declined by more than 40%.
Key Takeaway
The UVIX, SDS, and SQQQ ETFs are experiencing a surge in trading volumes, signaling strong investor interest. These ETFs attract tactical investors seeking to capitalize on bearish sentiment, leveraging their potential to profit from downturns in specific assets.
