Schwab: Active Traders Embracing Volatility
BOSTON (TheStreet) -- Active traders welcome market volatility and are more optimistic about market conditions than they were six months ago. They remain concerned, however, about whether their portfolios are properly hedged against risk.
That's the assessment gleaned by
Schwab's
(SCHW) - Get Report
latest Active Trader Sentiment Survey, a poll of more than 500 individual investors who trade at least 36 times per year.
Thirty-eight percent expressed a bullish outlook for the market in the next six months, up from 28% in the last survey published in April. Only 16% are bearish compared with 21% in April. The bullish sentiment means money is starting to come off the sidelines. Only 36% of traders recently changed their portfolio allocation to include more cash, down from 43% in April.
Seven out of 10 active traders consider market volatility "a friend," compared with 29% who view volatility as "a foe."
The positive outlooks are tempered by the finding that only 14% say they are very confident their portfolios are properly hedged against risk.
The survey also found evidence that active traders are increasingly trading more than just domestic equities. Nearly half report they are regularly trading options to generate extra income. Fifty-six percent said they are exposed to foreign equities, predominantly through Exchange-Traded Funds or American Depository Receipts of non-U.S. based companies.
Traders participating in the Schwab survey also showed a preference for technology stocks. Thirty-eight percent say they are the most bullish on the technology sector, followed by materials (17%), financials (12%), industrials (10%) and consumer discretionary (6%).
-- Written by Joe Mont in Boston.
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