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The stock market involves risk. Please invest with caution!

What Are ETF/ETN?

ETF stands for Exchange-Traded Fund. It is a fund product that can be traded just like a stock. Most ETFs are index funds, meaning they invest in the constituent securities of a given index in order to generate returns that roughly track that index.

ETN stands for Exchange-Traded Note. It is very similar to an ETF in that it also trades on an exchange and generally tracks certain indexes. An ETN is a debt note. The ETN issuer promises to pay you an amount tied to a specific index on the maturity date.

ETF and ETN look similar by name, and in practice they may also seem similar since both can be used to invest in an index. So what is the difference? An ETF is fundamentally a fund. Tracking an index is its objective, but in practice it is difficult to build a portfolio that perfectly replicates an index, so there may be tracking error. ETNs do not have this issue in the same way, because the issuer guarantees payment based on the index. However, ETNs therefore carry counterparty risk. If the ETN issuer goes bankrupt, it may not be able to make payments according to the ETN terms, so the issuer’s credit rating can also affect the ETN’s market price.

What ETF/ETNs Track

There are hundreds or even thousands of different ETF/ETNs in the US market, including broad market indexes, sector indexes, volatility indexes, futures, bonds, foreign exchange, and more.

In addition, ETF/ETNs can track an index not only on the long side but also on the inverse side. In other words, there are bullish and bearish products. Investing in an inverse product means you make money when the index goes down and lose money when it goes up.

ETF/ETNs generally have very high trading volume.

Why Trade ETF/ETNs?

ETF/ETNs have several advantages. Here are a few examples:

  • Diversification: this is built into their structure
  • Convenient trading: they can be bought and sold like stocks, making them easy for individual investors to use
  • Ability to profit from both rising and falling markets through long and inverse products
  • Leverage may be available: they can be purchased using margin
  • There may be opportunities to profit regardless of overall market direction, sometimes even substantially
  • There are relatively stable investment options, such as broad market index products

So ETFs can be favorites for speculators, while also serving as a core holding for medium- to long-term investors. Whether you prefer one style or another, you can find something that fits you in the world of ETF/ETNs.

Some ETF/ETN Examples

Leveraged ETF/ETNs

First, a quick reminder: leverage means higher risk and higher potential return or loss, so leveraged ETF/ETNs generally involve greater trading risk.

Leveraged ETFs are mainly 2x and 3x products, with both long and short versions. Common daily target moves are positive 200% or 300% of the underlying index, or negative 200% or 300% of the underlying index.

For example:

  • If the Nasdaq Index rises 1% in one day, a 1x long Nasdaq ETF would also rise by about 1%, a 2x long ETF by about 2%, and a 3x long ETF by about 3%.
  • If the Nasdaq Index falls 1% in one day, a 1x short Nasdaq ETF would instead rise by about 1%, a 2x short ETF by about 2%, and a 3x short ETF by about 3%.

However, the percentages above are theoretical values used for illustration. Actual performance still depends on how the market prices and trades each individual product.

Index ETF/ETNs

ETF Ticker ETF Full Name ETF Ticker ETF Full Name
DIA Dow Jones Index ETF DOG Dow ETF-Proshares 1x Short
DDM Dow ETF-Proshares 2x Long DXD Dow ETF-Proshares 2x Short
UDOW Dow ETF-Proshares 3x Long SDOW Dow ETF-Proshares 3x Short
QQQ Nasdaq 100 ETF PSQ Nasdaq 100 ETF-Proshares 1x Short
QLD Nasdaq 100 ETF-Proshares 2x Long QID Nasdaq 100 ETF-Proshares 2x Short
TQQQ Nasdaq 100 ETF-Proshares 3x Long SQQQ Nasdaq 100 ETF-Proshares 3x Short
SPY S&P 500 ETF-SPDR SH S&P 500 ETF-Proshares 1x Short
SSO S&P 500 ETF-Proshares 2x Long SDS S&P 500 ETF-Proshares 2x Short
UPRO S&P 500 ETF-Proshares 3x Long SPXU S&P 500 ETF-Proshares 3x Short
IWM Russell 2000 Index RWM Russell 2000 Index Short
UWM Russell 2000 Index 2x Long TWM Russell 2000 Index 2x Short
TNA Russell 2000 Index 3x Long TZA Russell 2000 Index 3x Short

US Volatility Index ETF/ETNs

ETF Ticker ETF Full Name ETF Ticker ETF Full Name
VIX S&P 500 Volatility Index TVIX 2x Long VIX Short-Term Futures Index
VXX Long VIX Short-Term Futures Index
VXZ Long VIX Mid-Term Futures Index SVXY Short VIX Short-Term Futures Index
UVXY 2x Long VIX Short-Term Futures Index Short VIX Short-Term Futures Index

Crude Oil and Precious Metals Futures ETF/ETNs

ETF Ticker ETF Full Name ETF Ticker ETF Full Name
USO United States Oil Fund DTO Crude Oil Index 2x Short
UCO Crude Oil Index 2x Long SCO Crude Oil Index 2x Short
UGAZ 3x Long Natural Gas DGAZ 3x Short Natural Gas
GLD Gold Index SPDR Long
IAU Gold Index iShares Long DGZ Gold Index Short
DGP Gold Index 2x Long DZZ Gold Index 2x Short
UGL Gold Index 2x Long GLL Gold Index 2x Short
SLV Silver Index Long
AGQ Silver Index 2x Long ZSL Silver Index 2x Short
USLV Silver Index 3x Long

International Market ETF/ETNs

ETF Ticker ETF Full Name ETF Ticker ETF Full Name
VGK Vanguard MSCI Europe Major Markets Index EZU Vanguard MSCI European Union Country Markets Index
RUSL 3x Long Russia Index RUSS 3x Short Russia Index
CHAU CSI 300 Index Long CHAD CSI 300 Index Short
CNXT CSI Small-Cap Long FXP China 2x Short
XPP China 25 Index 2x Long YXI China 25 Index Short
YINN FTSE China 50 3x Long YANG FTSE China 50 Weighted Stocks 3x Short

How do you buy ETFs? What should you check before buying an ETF?

If you're interested in investing in ETFs for the long term, you can try Moomoo. It supports all the types of ETFs I mentioned above—not just single-stock ETFs, leveraged ETFs, inverse ETFs, and high-dividend ETFs—but ETF trading is also currently commission-free, which can save you a meaningful amount of money right from the start.

Buying ETFs on Moomoo comes with no extra fees, which is pretty nice.

Before buying an ETF, there are a few things I personally check. Here I'll use Moomoo as an example to walk you through them.

1. Check the holdings

On the ETF page in moomoo, click "Holdings" to see which companies the ETF actually owns. This helps you confirm that what you're buying isn't a "black box," but a basket of clearly visible, high-quality companies. For example, with SPY, you can see that it holds major tech names like Nvidia and Apple.

2. Check the Morningstar rating and quantitative analysis

Under the "Constituents" tab on Moomoo's ETF page, you can view the Morningstar rating and quantitative analysis. Morningstar is one of the world's most authoritative fund rating agencies. It doesn't just assign a star rating—it also evaluates the fund across three time frames: the past 3 years, 5 years, and 10 years, while also showing the corresponding annualized returns.

Even more useful is the quantitative analysis below that. For example, for SPY, its return potential ranks above 80% of peers, its investment value ranks above 61.81% of peers, and its risk resistance ranks above 44.35% of peers. This doesn't simply tell you whether the ETF is good or bad—it tells you where it stands relative to similar products. Before buying an ETF, this kind of side-by-side comparison can help you avoid buying something that "looks good" but is only middle-of-the-pack within its category.

3. Check dividend distributions

The third thing is the ETF's dividend history. I focus on two things here. First is the trend in dividends per share. In the SPY example below, it rose from $6.321 in 2022 to $7.281 in 2025, increasing for four straight years. That suggests the companies held by the ETF are improving their overall profitability, and that the dividend growth is real.

Second is the payout frequency. SPY pays 4 times per year, or once per quarter, which provides relatively stable cash flow. This is important for long-term holders: when you buy an ETF, you're not just waiting for the price to go up—dividends are also part of your return, and whether those dividends can continue growing is another reflection of the quality of the ETF's underlying assets.

Conclusion

For beginner investors, I personally think the simplest options are SPY (VOO) and QQQ (QQQM). The former represents some of the best companies in the U.S., while the latter represents leading U.S. technology companies. If you plan to hold for the long term and not trade frequently, you can choose the lower-fee ETF shown in parentheses. In addition, SGOV is worth considering for people who don't like risk. It generally tracks the yield on short-term U.S. Treasuries, and compared with buying CDs, it's a bit more flexible while offering a similar yield.

The stock market has its ups and downs, so mindset matters, and experience matters too. Also, before trading more complex derivatives—such as the so-called fear index, VIX—it's best to first understand how the index is calculated, so you can better understand the risks you're taking on. Beginners should be very cautious with leverage.

Wishing everyone success in catching the upside in every stock!

About Moomoo

Sign up for Moomoo through this site’s exclusive link and meet the deposit requirements to qualify for up to three rewards: up to $1,000 in Anthropic stock, $100 in trading coupons, and up to 8.1% APY on idle cash. You can also enjoy one year of Moomoo Engine’s premium features for free. Here’s a closer look at each offer. I think the best value is depositing $2,000 to get $200. If you have enough funds, you can deposit $10,000 to get $300. Idle cash can also earn 8.1% APY. The promotion expires on November 30!

First reward: New-user deposit bonus, worth up to $1,000 in Anthropic stock

  • Make an initial cumulative deposit of $500 to receive $30 worth of Anthropic stock -> 60-day holding period
  • Make an initial cumulative deposit of $2,000 to receive a cumulative total of $100 worth of Anthropic stock -> 60-day holding period
  • Make an initial cumulative deposit of $10,000 to receive a cumulative total of $200 worth of Anthropic stock> 60-day holding period
  • Make an initial cumulative deposit of $50,000 to receive a cumulative total of $400 worth of Anthropic stock -> 120-day holding period ($200 released after 60 days and the remaining $200 after 120 days)
  • Make an initial cumulative deposit of $100,000 to receive a cumulative total of $1,000 worth of Anthropic stock -> 180-day holding period ($200 released after 60 days, $400 after 120 days, and the remaining $400 after 180 days)

You can trade with your deposit or simply leave it in your account to earn interest. If you plan to trade, I recommend depositing a bit more so losses don’t bring your balance below the required threshold!

Second reward: Trading coupons. New users who deposit $100 receive 10 $10 trading coupons

  • You can use one coupon for each trade of $100 or more, which is basically an incentive to trade more. If you just want to cash out, you can buy SGOV.
  • You can also get another $10*10 in trading coupons if you refer a friend who signs up for Moomoo.

Third reward: High yield for new users, with up to 8.1% APY through the account-opening Cash Sweep bonus

  • New customers can participate in Cash Sweep as soon as they open an account. The coupon will be sent to the account and must be activated in the app.
  • Idle cash can earn 3.35% APY plus a 2-month 4.75% APY booster (with deposits and withdrawals available at any time and automatic trade settlement). This 8.1% APY applies only to the first $20,000 in cash deposits.

Note: This article covers Moomoo U.S. benefits and product features. Applicants using an SSN or ITIN can receive the rewards as usual by entering a U.S. address.

Don't forget to also check out this site's recommendations for different U.S. stock trading apps!

Stock Market Basics

Here are some popular U.S. stock brokerages and their account-opening bonuses:

Overview Sign-Up Bonus Quick Take
Moomoo $200 in stock vouchers + $1,000 in Anthropic stock + 8.1% APY Feature-rich with a strong Chinese-language experience. Its market data, Level 2 quotes, options, and cash management features are useful for everyone from beginners to active traders.
TradeUp 50 shares of NVDA + a chance to win 5 shares + 4% for three months Well suited to active trading, with competitive trading fees and margin rates for U.S. tax residents. It supports Web Trading and Level 2 quotes and offers Chinese-language customer service.
Webull 12 fractional shares + one month of Premium membership Strong charting and active-trading features, including technical indicators, options, and premarket and after-hours trading. A good fit for frequent traders.
BBAE Up to $650 in rewards Convenient for Chinese users to open an account; applications are accepted without an SSN or ITIN. It offers good Chinese-language support, but currently charges a platform fee, making it less suitable for frequent trading with small amounts.
Robinhood A chance to win 1 share of stock Its simple interface is easy to use, making it suitable for first-time U.S. stock investors. Gold members also get a higher yield on uninvested cash and lower margin rates.
Interactive Brokers Up to $1,000 A highly capable broker with access to global markets and multiple currencies. Its margin costs are competitive, and Chinese residents can also open accounts. A good fit for experienced investors and those investing globally.
TradeStation $250 Geared toward professional and active traders, with powerful advanced charting, strategy backtesting, and automated trading tools. Most long-term investors may not need these features.
Schwab Up to $1,000 Well suited to long-term investing and larger portfolios, with convenient access to ETFs and CDs. Checking accounts and global ATM access are also advantages, but the default yield on uninvested cash is relatively low.
Fidelity Account opening link A long-established full-service brokerage suited to long-term investing, ETFs, and retirement accounts. It also offers good cash management, making it a solid choice as a primary long-term brokerage.
BIT (formerly Matrixport) Earn $210 by depositing and trading Suitable for Chinese users and digital asset investors. You can use funds such as USDT and USDC to invest in U.S. stocks. It is not a traditional U.S. brokerage, so review its fees and asset custody structure separately.
SoFi Invest $75 for opening an account Easy to use and supports Stock Bits, making it suitable for small investments and long-term investing. It has fewer advanced market data and trading tools, so it is not ideal for frequent trading.
M1 Finance Get $10 when you deposit Focused on Pies and automated investing. It is well suited to setting a stock and ETF allocation and investing regularly over the long term, but not to active trading.

If you don’t have an SSN or ITIN but still want to invest in U.S. stocks, consider the brokerages and platforms below. They accept a full set of Chinese documents, and you can register with a national ID card or passport. None participates in China’s CRS.

  • BBAE: Welcoming to Chinese users; no SSN or ITIN required to open an account
  • BIT (formerly Matrixport): Open an account with a national ID card; approval can take just a few hours.
  • Bitget: Complete identity verification with a national ID card or Chinese passport

If you’re in China and want to invest in U.S. stocks, see this overview: