Editing Exchange-traded fund (section)

===Trading===
ETFs can be bought and sold at current market prices at any time during the trading day, unlike [[mutual funds]], which can only be traded at the end of the trading day. Also unlike mutual funds, investors can execute the same types of trades that they can with a stock, such as [[limit order]]s, which allow investors to specify the price points at which they are willing to trade, [[stop-loss order]]s, [[margin buying]], [[hedge (finance)|hedging]] strategies, and there is no minimum investment requirement. ETFs can be traded frequently to hedge risk or implement [[market timing]] investment strategies, whereas many mutual funds have restrictions on frequent trading.<ref name=ConceptRelease/><ref>{{Cite book |last=Gastineau |first=Gary |url=https://books.google.com/books?id=CIYoyIrP6cIC |title=The Exchange-Traded Funds Manual |publisher=[[Wiley (publisher)|Wiley]] |year=2002 |isbn=978-0-471-21894-4 |page=227}}</ref>

[[Option (finance)|Options]], including [[put option]]s and [[call option]]s, can be written or purchased on most ETFs – which is not possible with mutual funds, allowing investors to implement strategies such as [[covered call]]s  on ETFs. There are also several ETFs that implement covered call strategies within the funds.<ref>{{Cite web |last=Nibley |first=Brian |date=March 5, 2021 |title=Pros and Cons of a Covered Call ETF—and When to Buy |url=https://www.sofi.com/learn/content/covered-call-etf/ |website=[[SoFi]]}}</ref><ref>{{Cite news |last=Heinzl |first=John |date=July 25, 2014 |title=Don't be tempted by covered call ETF yields |work=[[The Globe and Mail]] |url=https://www.theglobeandmail.com/globe-investor/investor-education/dont-be-tempted-by-covered-call-etf-yields/article19782362/}}</ref><ref>{{Cite news |date=July 23, 2021 |title=It's Looking Like a Fine Time to Consider Covered Call ETFs |work=[[Nasdaq]] |url=https://www.nasdaq.com/articles/its-looking-like-a-fine-time-to-consider-covered-call-etfs-2021-07-23}}</ref>

Many mutual funds must be held in an account at the issuing firm, while ETFs can be traded via any stockbroker. Some stockbrokers do not allow for automatic recurring investments or trading fractional shares of ETFs, while these are allowed by all mutual fund issuers.<ref name=schwabvs/>

The most popular ETFs such as those tracking the [[S&P 500]] trade tens of millions of shares per day and have strong [[market liquidity]], while there are many ETFs that do not trade very often, and thus might be difficult to sell compared to more liquid ETFs. The most active ETFs are ''very'' liquid, with high regular trading volume and tight [[bid-ask spread]]s (the gap between buyer and seller's prices), and the price thus fluctuates throughout the day. This is in contrast with mutual funds, where all purchases or sales on a given day are executed at the same price at the end of the trading day.