As ETFs continue to gain popularity, so have trading options on ETFs, and Cory Mitchell of, and lists the most liquid ETFs in the market today for options traders.

On most days, ETFs are among the most heavily-traded names in the investing world. This is a sure sign that active traders are using ETFs-a transparent, cost-effective way to trade market fluctuations-to gain access to a very wide range of sectors, commodities, countries, indexes, currencies and assets. The options market for ETFs has also been gaining steam. Whether you are looking to buy calls on the potential upside of an ETF, buy puts on a potential decline, or write options, in the well-established ETF names, you are likely to find a willing counter-party.

Options are an additional tool used for speculation, or risk control. Buying calls and puts limits the buyer's risk to the cost of a contract, which is a fraction of the cost of buying/shorting the actual ETF, but still lets the buyer profit from favorable moves. Options can also be used to hedge a position, create very low-risk trading strategies using numerous options, or create an additional stream of income through writing options on already established ETF positions.

Below, in no particular order, we cover 13 of the 100 most liquid ETFs by trading volume that have very active options markets:

1. SPDR S&P 500 (SPY)
This ETF is consistently one of the most actively-traded securities listed on US markets, averaging over 130 million shares per day. Daily call and put volume with a strike price within several dollars of the current ETF price usually accounts for 100,000 contracts or more in the nearest expiry month, with additional volume for strikes well away from the current price and with further out expiry dates. There is likely to be open interest of hundreds of thousands of contracts at any given time.

2. SPDR Gold Trust (GLD)
For those looking to trade the price of gold, this popular ETF usually does more than nine million in daily average volume and is backed by physical gold holdings. GLD options are available across a wide range of strikes and expiry dates, but volume is generally focused around the nearest expiry, or a few months out, with a strike price near the current ETF price. If you trade in this "active pocket" of the options market, you can usually expect more than 5,000 call or put options to change hands each day. There may be open interest of hundreds of thousands on a given contract at a given time.

3. iShares MSCI Brazil Index (EWZ)
Providing access to the often volatile Brazilian equity market, this ETF attracts active traders with its more than 10 million shares per day trading volume and established options market. Volume in EWZ options is focused on near-term expiry dates, and volume is insignificant on far-out-of-the-money options (with a strike price more than $5 away from the current ETF price). Trade contracts within a couple months of expiry and with active strike prices and daily call and put volume of 1,000 to 3,000 contracts can be expected.

4. iShares FTSE China 25 Index Fund (FXI)
With China's expansion over the last several years, the interest in an ETF that tracks its top companies has also blossomed. The ETF usually does more than 15 million in daily volume, and it has a very active options markets. Call and put volume is in the thousands to tens of thousands per day, depending on the strike and expiry date. Open interest can range from thousands to tens of thousands at very active strikes, and sometimes hundreds of thousands.

5. Barclays 20 Year Treasury Bond Fund (TLT)
One of most active bond ETFs, daily volume is often above 4.5 million shares and has significant (thousands) call and put volume across a wide range of strike prices, and varying expiry dates. Open interest of a couple thousand shares is not uncommon in a wide array of front month (next to expire) strikes, but will vary based on market conditions and the movement of the ETF price.

NEXT PAGE: 8 More Liquid ETFs

Tickers Mentioned: TLT, FXI, EWZ, GLD, SPY