Top 10 Most Traded Leveraged ETFs (UVXY, SDS)

Leveraged exchange-traded funds (ETFs) use the futures markets to magnify the returns of a specific index. There are leveraged ETFs that look to double or even triple the daily return of an index, and there are some that look to return the opposite of an index.

The first ETF, the State Street SPDR Standard & Poor's 500 ETF, was launched in 1993. Since then, ETFs account for over $2 trillion in assets and have largely surpassed mutual funds in popularity. The first leveraged ETFs didn't appear until 2006. Acceptance of these products has taken a little longer, but they are now a part of many traders' investment strategies.

Leveraged ETFs are generally used by traders who are looking to take short-term positions in indexes or commodities. Better suited to trading opportunities, leveraged ETFs usually don't make an appropriate longer-term investment due to the high cost structure that comes with the high level of trading needed to maintain the fund's positions. Some leveraged ETFs have expense ratios near 2%.

Due to the leverage involved, these ETFs can be highly volatile, and the risk of principal loss with these funds is significant. Regardless, many of these leveraged ETFs still trade millions of shares daily.

The ProShares Ultra VIX Short-Term Futures ETF (NYSEARCA: UVXY) looks to double the daily performance of the S&P 500 VIX Short-Term Futures Index.

ProShares is one of the market's leading providers of leveraged ETFs. The S&P 500 VIX Short-Term Futures Index spiked to near record levels in August, leading many traders to try to profit from the market's increased volatility. This ETF served its purpose during the month of August 2015, returning a total of 167%. Despite that, the fund is still down a total of almost 80% since Jan. 1, 2015.

This ETF trades approximately 19 million shares daily.

The ProShares UltraShort S&P500 ETF (NYSEARCA: SDS) seeks a daily return that corresponds to two times the inverse of the S&P 500. This is the first of several bear market ETFs on this list, indicating that traders are often more inclined to bet on a downward movement in the market than an upward one.

This ETF trades approximately 15 million shares daily.

The ProShares UltraPro Short QQQ ETF (NYSEARCA: SQQQ) looks to return triple the inverse of the daily performance of the NASDAQ 100. This ETF uses a modified market index, looking to target the largest NASDAQ-traded securities, but it also excludes financial stocks. The NASDAQ has been on a relatively steady upward climb over the last five years; so, predictably, this ETF has gone almost straight down. Traders, however, still find it a useful trading vehicle.

This ETF trades approximately 10 million shares daily.

The Direxion Daily Gold Miners Bear 3x Shares ETF (NYSEARCA: DUST) seeks to return triple the inverse of the daily performance of the NYSEARCA Gold Miners Index. Gold is quite possibly the most commonly traded precious metal on Wall Street, which makes an ETF such as this popular among traders. As would be expected, this ETF has been very volatile so far in 2015, trading as low as $12 and as high as nearly $40.

This ETF trades approximately 8 million shares daily.

The ProShares Ultra Bloomberg Crude Oil ETF (NYSEARCA: UCO) looks to replicate twice the daily performance of the Bloomberg WTI Crude Oil Subindex. If gold has been the most popular commodity to trade, oil isn't too far behind. The 2014 free fall in the crude oil spot price has created many trading opportunities for market watchers, making the ProShares Ultra Bloomberg Crude Oil ETF a popular ETF to use.

This ETF trades approximately 8 million shares daily.

The ProShares UltraPro Short S&P500 ETF (NYSEARCA: SPXU) seeks the daily return of three times the inverse of the S&P 500. This ETF delivered on its objective during August's market volatility. From Aug. 16, 2015, to Aug. 25, 2015, this ETF returned a total of 40% during a time when the S&P 500 dropped over 11%.

This ETF trades approximately 7 million shares daily.

The ProShares Daily S&P 500 Bear 3x Shares ETF (NYSEARCA: SPXS) seeks to return triple the inverse of the daily performance of the S&P 500. This ETF is substantially similar to the aforementioned UltraPro Short S&P 500 ETF, but it is offered by Direxion, another popular provider of leveraged ETFs.

This ETF trades approximately 7 million shares daily.

The ProShares UltraShort QQQ ETF (NYSEARCA: QID) seeks daily investment results that correspond to two times the inverse of the NASDAQ 100. This ETF is managed similarly to its sister fund, the aforementioned UltraPro Short QQQ ETF, but that one looks to return double the inverse of the index as opposed to triple.

This ETF trades approximately 5 million shares daily.

The first bull market leveraged ETF finally comes in at number nine on the list. The Direxion Daily Small Cap Bull 3X Shares ETF (NYSEARCA: TNA) looks to return triple the daily performance of the Russell 2000 Index. The inherent increased volatility that comes with small-cap stocks makes for an ideal investment among traders who are looking to make a speculative trade in small caps. This fund is the oldest triple-leveraged ETF in the marketplace.

This ETF trades approximately 5 million shares daily.

Wrapping up the top 10 is another bull market fund. The ProShares Ultra S&P500 ETF (NYSEARCA: SSO) seeks to double the daily performance of the S&P 500. While sharing an investment objective with other funds on this list, this ETF holds the distinction of having the lowest annual expense ratio at 0.89% as of Nov. 3, 2015.

This ETF trades approximately 5 million shares daily.