Active Traders Embrace ETFs and Options to Help Manage Risk, Schwab Survey Finds

Traders Making Necessary Adjustments to Better Navigate Changing Market Environment

Monday, February 23, 2009 7:00 am PST



Public Company Information:


NEW YORK--(BUSINESS WIRE)--At The International Traders Expo in New York today, Charles Schwab released new survey data revealing that active traders remain highly engaged in the market but are looking for ways to better manage risk during this period of record volatility.

The latest Charles Schwab Active Trader Sentiment survey polled more than 700 individual investors who trade frequently. Findings include:

  • Nearly one in four respondents consider exchange traded funds (ETFs) the most appealing investment vehicle.
  • 44 percent of respondents trade options regularly.
  • 27 percent of those use options primarily for risk management.
  • 90 percent intend to maintain or increase the number of trades they make in the next six months, up from 83 percent in the May 2008 survey.

“Traders are starting to face the new reality,” noted Kelli Keough, vice president of Schwab’s Active Trading Services. “In this market, everything revolves around taking back control and minimizing downside risk. “

The Schwab survey finds that 24 percent of active traders are now using ETFs as their primary investment vehicle. “ETFs, which trade like stocks, can be a good way to gain exposure to sector or industry trends,” notes Randy Frederick, director of trading and derivatives at Charles Schwab. “With so many ETFs available, there’s something for most investment styles and strategies.”

The findings of the Schwab survey also show that traders are embracing options as an effective way to help protect their investments. Twenty-seven percent of respondents who trade options are now using them primarily for risk management as opposed to pure speculation. This compares with just 18 percent from a Schwab sentiment survey released in May 2008.

Other key survey findings include:

  • 43 percent of traders surveyed expect the S&P 500 to rise over the next six months.
  • 17 percent expect the S&P 500 to fall over the next six months.
  • 40 percent are looking for a flat market in the next six month.

“The survey results are further evidence that active traders are adjusting to the market,” added Frederick. “Even in this difficult environment, traders can find opportunities if they know where to look.”

Survey Methodology

Survey data were derived from responses of more than 700 active traders and investors collected in November of 2008 and January 2009. The data were analyzed by Directive Analytics and have a statistical accuracy of + or – 4.4 percent at 95 percent confidence level.

About Charles Schwab

The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.4 million client brokerage accounts, 1.5 million corporate retirement plan participants, 468,000 banking accounts, and $1.1 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC,, and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through its Advisor Services division. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. More information is available at (0209-7249)

Exchange Traded Funds are subject to risks similar to those of stocks. Investment returns will fluctuate and are subject to market volatility, so that an investor's shares, when redeemed or sold, may be worth more or less than their original cost. Investments in foreign investments may incur greater risks than domestic investments. Past performance is no guarantee of future results.

Investors should carefully consider information contained in the prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by calling Schwab at 800-435-4000. Please read the prospectus carefully before investing.

Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Please read the Options Disclosure Document titled "Characteristics and Risks of Standardized Options" before considering any option transaction. Call your local Schwab office or write Charles Schwab & Co., Inc. 101 Montgomery Street, San Francisco, CA 94104 for a current copy.

Supporting documentation for any claims and statistical information is available upon request.


Charles Schwab
David Weiskopf, 415-636-5753
Intermarket Communications
Clayton McGratty, 212-754-5425

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