The Top ETFs for Day Trading in 2022

Jan 26, 2024 By Triston Martin

By initiating and closing trades often during the day, day traders hope to maximize their earnings. Close all of their available jobs daily and don't keep them open for future days. Exchange-traded funds (ETFs) have also become popular as a means of day trading in addition to equities. Diversification, high liquidity as well as real-time trading, and cheap transaction costs are all provided by mutual funds. A few ETFs could also qualify for tax advantages depending on the qualifying requirements and financial restrictions. In this post, we'll look at the top ETFs for Day Trading.


The Best Day Trading ETFs


The Vanguard S&P 500 (VOO):



VOO monitors the S&P 500 Index, representing the 500 largest publicly traded firms in the United States. Like the S&P 500 Index, this exchange-traded fund (ETF) makes investments in S&P 500-compliant companies. It has been able to replicate the index's performance with little tracking error accurately. In addition to having one of the highest average daily traded volumes of 4.6 million shares, VOO is among the lowest cost ratios, coming in at just 0.03 percent. This makes it the go-to choice for day traders.


S&P 500 ETFs iShares Core (IVV) and SPDR (SPY)



The IVV and SPY ETFs function similarly to the VOO ETF. Regarding cost ratios, SPY has a 0.09 percent higher expense ratio than the S&P 500. IVV and VOO both have a 0.03 percent cost-to-income ratio. Additionally, the SPY provides significantly increased levels of liquidity, as seen by its 88.6 million shares daily trading volume on average.


VTI (Vanguard Total Stock Market ETF):


By tracking the CRSP US Total Market Index, VTI hopes to achieve the same level of success as the CRSP index. This index contains NYSE/NASDAQ large-, mid-, small-, and micro-cap companies. With this ETF, a trader may take advantage of a more diverse range of equities across numerous market capitalizations. VTI is a fantastic alternative for day traders, given that its expense ratio is just 0.03 percent and its daily trading volume is 4.3 million shares.


SCHB (Schwab U.S. Broad Market ETF):


One other broad-based market ETF, the Dow Jones of U.S. Broad Stock Market Index, is also tracked by this ETF. The top 2,500 publicly listed corporations in the United States are included in the index. Approximately 500,000 shares are traded daily on this ETF, which has an expense ratio of 0.03 percent.


The iShares Treasury Floating Rate Bond (TFLO):


TFLO is an innovative and cost-effective choice for day traders looking for a bond ETF. For this fund, the Barclays of the U.S. Treasury Floating Rate Index is used as a benchmark for comparison. This ETF has accurately replicated the benchmark index with minimum tracking error. The expenditure ratio is 0.15 percent, but a fee waiver is available for the same amount. Thus the effective expense ratio is zero.


TLT (iShares 20+ Year Treasury Bond ETF):


TLT is yet another bond-based exchange-traded fund that tracks the performance of an index that offers exposure to long-term U.S. Treasury securities. This index is the ICE U.S. Treasury 20+ Year Index. With an average of 16 million ETF shares traded daily, it has a high level of liquidity. It has appropriately reflected the performance of the reference index. However, it has a 0.15 percent expense ratio above the industry average.


Schwab United States TIPS ETF (SCHP):


Inflation worries or an interest in inflation-protected investments? SCHP provides a perfect match. A market-value-based index of U.S. Treasury asset prices bonds with at least one year left to maturity follows the performance of Bloomberg Barclays U.S. Treasury Asset prices Securities (Series-L) Bond Index. SCHP is an excellent choice for day traders, thanks to its low-cost ratio of only 0.05 percent and the average daily trading volume of 2.2 million shares.


Conclusion


Because most day traders use margin to leverage their holdings, the stakes in day trading are relatively high. You may trade less cash with margin-based leverage and assume a more considerable risk. As a result, it is vital to maintain transaction costs low and actual earnings significant to account for the rare loss. Day traders may increase their earnings using the abovementioned criteria to choose the best ETFs.

Related Articles