EXCHANGE-TRADED FUND (ETF) TRADING IS THE BUYING AND SELLING OF A TYPE OF POOLED INVESTMENT SECURITY THAT OPERATES MUCH LIKE A MUTUAL FUND INCLUDING ANYTHING FROM THE PRICE OF AN INDIVIDUAL COMMODITY TO A LARGE AND DIVERSE COLLECTION OF SECURITIES.
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An exchange-traded fund (ETF) is similar to a traditional mutual fund in that it involves a pooled investment. One of the biggest differences is that ETFs can be traded intraday like stocks. Moreover, ETFs are classified as a passive investment as they generally track market indices or specific sector indices. Find different types of ETFs ZERO Markets offer here.
At ZERO Markets you can trade CFDs on a wide variety of global ETFs including Bond, Gold, Commodities and more, all with a trusted broker headquartered in Australia. You can enter and exit trades whenever you want to, close to 24/5, across almost all ETFs markets.
At ZERO Markets we offer CFDs on our MT5 platform to trade ETF. This form of trading allows you to speculate on the changing prices of ETFs without owning the physical ETF you’re trading. Essentially, a CFD is a contract between the trader and the broker.
For example, if you opened a long (buy) CFD trade on Ishares Core U.S. Aggregate Bond ETF (AGG.arc) when it was valued at $100.00, and you closed the trade when the price rose to $105.00, you would make a profit $5.00. If the price fell to $95.00, you would make a loss of $5.00. In basic terms, you are paying or receiving the difference between the opening and closing price of the ETF being traded.
ETFs are made up of multiple underlying assets which allow investors to gain exposure to specific sectors or industries with a single investment/trade. They can also be utilised to manage risk. If an investor has high exposure to a specific sector, they could short an industry-sector ETF to mitigate that risk.
When compared to mutual funds, ETFs have significantly lower costs. These costs can be streamlined which results in a reduction of operational and trading costs among others.
It is a requirement for ETFs to disclose their holdings on a daily basis. This means that you know exactly what you are buying and how it is performing at any point in time.
Unlike mutual funds, ETFs have intraday trading which allows them to be bought as sold during market trading hours. Investors can make timely decisions and efficiently monitor, change, or alter their investment allocation. Short-selling and leveraged trading options further highlight the trading flexibility that ETFs provide.
Exchange-traded funds are traded on all major asset classes including stocks,
bonds, commodities and currencies. Here is a brief look at the most popular
ETFs currently being traded.
Also known as equity ETFs, these comprise a collection of stocks based on industry, sector or even size. There are ETFs that focus on banking stocks, tech stocks or companies with a certain market
Often referred to as fixed income ETFs, many investors attribute a portion of their portfolio to an investment that provides a steady return with a potentially lower risk.
Precious metals and natural resources are an attractive alternative to stocks that provide the added benefits of portfolio diversification and risk management. Commodity ETFs track the price of the underlying asset such as gold, silver or oil.
These ETFs will invest in either a single currency such as the US Dollar or a collection of currencies. With the ability to open long positions and short positions, currency ETFs are often used to hedge against currency risk.
The soaring popularity of exchange-traded funds has seen the formation of dedicated ETF providers such as Vanguard, BetaShares and iShares by Blackrock.
Due to the numerous benefits they provide, ETFs are popular among beginner investors and individual traders. Their features also make them suitable for the use of various trading and investment strategies. The following are common trading strategies used for trading ETFs across numerous asset classes:
Is the technique of buying a fixed dollar amount of an asset on a recurring schedule regardless of any change in price. The cost of acquiring the asset is averaged out over time and is often used as a savings process for beginner investors.
Investors can counter risk and market uncertainty by hedging their investments. If any given portfolio is exposed to a particular sector or currency, an investor can offset any losses by opening an equivalent short position.
The trading flexibility of ETFs makes it easy for inexperienced investors to rotate the sectors they are investing in based on the economic cycle. An investor may elect to take profits they have earned from a volatile sector and transfer them to a less risky asset class for a certain period.
After creating an MT5 account with Zero Markets, investors will need to fund that account before investing in ETFs. Zero Markets offer flexible funding options, instant funding, no deposit fees and numerous acceptable currencies. Once complete you can buy and sell ETFs in the same way that you would trade shares of stocks.
MetaTrader5 is the favourite choice for ETF traders around the globe. Zero Markets’ MT5 is packed with extras to ensure you’re equipped with all the tools you need to make better informed trading decisions. Tight Raw Pricing, fast execution and superior charts are the building blocks for our MT5 solution.
The gross profit on your short position (or sell order) is calculated as follows:
$100.00 × 1 unit = $100.00
$95.00 × 1 unit = $95.00
$100.00 – $95.00 = $5.00
$105.00 × 1 unit = $105.00
$100.00 – $105.00 = -$5.00
Opening the position
The price of AGG.arc is $100.00 and you decide to sell 1 unit. The total value was $100.00 USD
Closing the position
A month later, if the AGG.arc price has decreased to $95.00 and you decide to take your profit by selling 1 unit AGG.arc. The total value is $95.00 and the gross profit is $5.00; if the AGG.arc price has increased to $105.00 and the total value is $105.00, the short selling trade loses $5.00.
ETF CFD commissions
|
Market |
Commission per side |
Minimum charge per side |
|
All |
3 CENTS/SHARE |
10 USD |
Trade from as low as 0.0 pips
| Symbol | Description | Contract Size | Leverage | Markups |
|---|---|---|---|---|
| ACWI | iShares MSCI ACWI ETF (ACWI.xnms) | 1 | 1:5 | 0 |
| AGG | iShares Core U.S. Aggregate Bond ETF (AGG.arcx) | 1 | 1:5 | 0 |
| BIL | SPDR Bloomberg 1-3 Month T-Bill ETF (BIL.arcx) | 1 | 1:5 | 0 |
| BND | Vanguard Total Bond Market ETF (BND.xnms) | 1 | 1:5 | 0 |
| BSV | Vanguard Short-Term Bond ETF (BSV.arcx) | 1 | 1:5 | 0 |
| DIA | SPDR DJIA ETF (DIA.arcx) | 1 | 1:5 | 0 |
| EEM | iShares MSCI Emerging Markets ETF (EEM.arcx) | 1 | 1:5 | 0 |
| EFA | iShares MSCI EAFE ETF (EFA.arcx) | 1 | 1:5 | 0 |
| GLD | SPDR Gold Shares ETF (GLD.arcx) | 1 | 1:5 | 0 |
| HYG | iShares iBoxx High Yield Corp Bond ETF (HYG.arcx) | 1 | 1:5 | 0 |
| ICLN | iShares Global Clean Energy ETF (ICLN.xnms) | 1 | 1:5 | 0 |
| IEI | iShares 3-7 Year Treasury Bond ETF (IEI.xnms) | 1 | 1:5 | 0 |
| IEMG | iShares Core MSCI Emerging Mkts ETF (IEMG.arcx) | 1 | 1:5 | 0 |
| IJH | iShares Core S&P Mid-Cap ETF (IJH.arcx) | 1 | 1:5 | 0 |
| IJR | iShares Core S&P Small-Cap ETF (IJR.arcx) | 1 | 1:5 | 0 |
| ITOT | iShares Core S&P Total US Stocks ETF (ITOT.arcx) | 1 | 1:5 | 0 |
| IVV | iShares Core S&P 500 ETF (IVV.arcx) | 1 | 1:5 | 0 |
| IVW | iShares S&P 500 Growth ETF (IVW.arcx) | 1 | 1:5 | 0 |
| IWD | iShares Russell 1000 Value ETF (IWD.arcx) | 1 | 1:5 | 0 |
| IWF | iShares Russell 1000 Growth ETF (IWF.arcx) | 1 | 1:5 | 0 |
| IWM | iShares Russell 2000 ETF (IWM.arcx) | 1 | 1:5 | 0 |
| LQD | iShares iBoxx IG Corp Bond ETF (LQD.arcx) | 1 | 1:5 | 0 |
| QQQ | Invesco QQQ Trust Series 1 ETF (QQQ.xnms) | 1 | 1:5 | 0 |
| SHV | iShares Short Treasury Bond ETF (SHV.xnms) | 1 | 1:5 | 0 |
| SHY | iShares 1-3 Year Treasury Bond ETF (SHY.xnms) | 1 | 1:5 | 0 |
| SPY | SPDR S&P 500 ETF (SPY.arcx) | 1 | 1:5 | 0 |
| SUSL | iShares ESG MSCI USA Leaders ETF (SUSL.xnms) | 1 | 1:5 | 0 |
| TIP | iShares TIPS Bond ETF (TIP.arcx) | 1 | 1:5 | 0 |
| TLT | iShares 20+ Year Treasury Bond ETF (TLT.xnms) | 1 | 1:5 | 0 |
| TQQQ | ProShares UltraPro QQQ ETF (TQQQ.xnms) | 1 | 1:5 | 0 |
| VB | Vanguard Small-Cap ETF (VB.arcx) | 1 | 1:5 | 0 |
| VCIT | Vanguard Intermediate-Term Corporate ETF (VCIT.xnms) | 1 | 1:5 | 0 |
| VCSH | Vanguard Short-Term Corp Bond ETF (VCSH.xnms) | 1 | 1:5 | 0 |
| VEA | Vanguard FTSE Developed Mkts ETF (VEA.arcx) | 1 | 1:5 | 0 |
| VGT | Vanguard Info Tech ETF (VGT.arcx) | 1 | 1:5 | 0 |
| VIG | Vanguard Dividend Appreciation ETF (VIG.arcx) | 1 | 1:5 | 0 |
| VNQ | Vanguard Real Estate ETF (VNQ.arcx) | 1 | 1:5 | 0 |
| VO | Vanguard Mid-Cap ETF (VO.arcx) | 1 | 1:5 | 0 |
| VOO | Vanguard S&P 500 ETF (VOO.arcx) | 1 | 1:5 | 0 |
| VTI | Vanguard Total Stock Mkt ETF (VTI.arcx) | 1 | 1:5 | 0 |
| VTV | Vanguard Value ETF (VTV.arcx) | 1 | 1:5 | 0 |
| VWO | Vanguard FTSE Emerging Mkts ETF (VWO.arcx) | 1 | 1:5 | 0 |
| VXUS | Vanguard Total International Stock ETF (VXUS.xnms) | 1 | 1:5 | 0 |
| VYM | Vanguard High Dividend Yield ETF (VYM.arcx) | 1 | 1:5 | 0 |
| XLF | Financial Select Sector SPDR ETF (XLF.arcx) | 1 | 1:5 | 0 |
| XLK | Technology Select Sector SPDR ETF (XLK.arcx) | 1 | 1:5 | 0 |
Open a Zero Markets trading account today and join over a million others globally trading 2,000+ markets on an easy-to-use platform. Go long or short with competitive spreads on indices, shares, forex, gold, commodities, cryptocurrencies, bonds and more. Plus, get extended hours on major US shares, AI-powered tools and 24/5 client support. Learn more about trading CFDs with Zero Markets.
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