Traditional

Traditional ETFs would be your standard index trackers ruled by iShares, which was recently sold by Barclays (BCS) to a European private-equity firm. Yeah - they’ll be kicking themselves for that one day.

Ask any trader what tracks the Russell 2000 Index (IWM) and he’ll rattle off IWM without thinking; the transports and he’ll tell you iShares Dow Jones Transportation Average (IYT); the utilities, iShares Dow Jones US Utilities (IDU) and so on.

IShares has grabbed the traditional index ETF market, and now that most of its ETFs are close to being in existence for 10 years, they've solidified their place in the game. The company's doing what any market leader should now do: educating the masses about the wonderful world of ETFs rather than trying to enter new markets or dilute what it's become very good at.

Trading

As volatility has moved even higher, short-term trading has once again taken center stage, as participants seek to reduce holding times and keep things simple. Enter what I call trading ETFs. Many in the industry were laughing at ProShares when they launched their double short financial ETF: UltraShort Financials ProShares (SKF). Well, as “Red” Auerbach liked to say, "They’re not laughing now," as ProShares has gone on to lead a revolution among traders and clearly solidify their position.

The ETF world is all about first-mover advantage, and being able to solidify your ETF within a trader’s mind is the difference between success and failure. Ask any single trader how he'd go about shorting the financials and he'll spout off SKF. Ask him how he would play a NASDAQ drop and the guttural response would be “QuIDS” After scratching your head you would realize he meant the ProShares UltraShort QQQQ (QID).

Furthermore, I don’t know a single trader who hasn’t dabbled in the UltraShort Real Estate ETF (SRS). And during my last appearance on TV on New Year’s, I discussed owning the ProShares UltraShort Utilities (SDP) and ProShares UltraShort Oil and Gas (DUG). Hmmm - maybe that’s why I haven’t yet been invited back.

ProShares solidified their spot immediately among the vast growing group of traders seeking to make money, regardless of the environment and regardless of the direction. They provide just as many long ETFs as they do short, and those names are known throughout the trading world just as well.