Free Trading School · Level 13: Trading Different Markets
ETFs and index trading
An ETF (exchange-traded fund) holds a basket of assets and trades like a single stock. Index ETFs such as those tracking the S&P 500, the Nasdaq 100 or the TSX 60 let you trade the whole market in one position.
- Diversified: one company's bad news barely moves the index.
- Smoother charts and fewer gaps than single stocks.
- Sector ETFs (technology, energy, banks) let you trade a theme.
- Leveraged and inverse ETFs exist but lose value over time in choppy markets; they are short-term tools, not investments.
Index ETFs are one of the best markets for learning: liquid, well-behaved and driven by the big picture.
Quick answers
An ETF (exchange-traded fund) holds a basket of assets and trades like a single stock. Index ETFs such as those tracking the S&P 500, the Nasdaq 100 or the TSX 60 let you trade the whole market in one position.
Index ETFs are one of the best markets for learning: liquid, well-behaved and driven by the big picture.
Diversification and liquidity. One position covers many companies and trades very actively.
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