Today's Hot Topics   ▲  |  ▼

As any trader who has ever been caught in a squeeze play learns painfully, liquidity is very important, especially when everyone heads for the exit at the same time. Here Stoyan Bojinov of ETFdb.com lists 17 of the most liquid ETFs available today. 

Investors of all walks have embraced ETFs as the investment vehicle of choice when it comes to accessing virtually any asset class in the global market. Persistent innovation in the exchange-traded universe has further propelled ETPs at the forefront of many active traders’ radar screens given the diverse, and growing, lineup of liquid financial instruments. Aside from the inherent transparency and diversification benefits associated with exchange-traded funds, traders have also come to embrace the liquid and cost-efficient nature of these tools.

As such, day traders have embraced these financial instruments as viable tools for achieving cheap and incredibly liquid exposure to any corner of the market. Whether its buying into a leveraged NASDAQ fund before Apple reports earnings in anticipation of a blowout quarter or selling gold after pessimistic FOMC minutes, ETFs have rightly earned the respect of many seasoned day traders.

Below we cover 17 of the 100 Most Liquid ETFs by trading volume, highlighting instances when each one might come in handy for those looking to make a short-term bet:

17. Industrial Select Sector SPDR (XLI)
This offering from State Street may come in handy for those looking to tap into the domestic industrials sector right before (or after) relevant economic data is released. Be sure to have this ETF on your radar screen the first business day after the end of every month as ISM manufacturing data hits the street; this figure is compiled based on a survey of purchasing managers in the US manufacturing industry.

16. S&P 500 VIX Short-Term Futures ETN (VXX)
For those that thrive on big swings in price, this ETN could be your dream tool. VXX offers exposure to volatility futures, and as such it can be utilized as a hedging tool in conjunction with other positions, or as a standalone trading instrument. Keep your eyes on this ETN every Thursday as weekly unemployment data comes out on the home front; this figure reflects the number of people who have filed for unemployment benefits for the first time during the past week, offering frequent insights into the health of the labor market.

15. United States Natural Gas Fund (UNG)
Commodity traders can take advantage of this notoriously volatile ETF every week as natural gas storage data comes out. This report hits the street every Thursday and profiles the number of cubic feet of fuel held during the past week, giving investors and traders alike further insights into supply and demand conditions going forward.