Active traders are less bullish about the stock market than they were in December, according to a survey released Monday.
Only 28 percent expressed a bullish outlook for the market in the next six months, down from 50 percent in the previous survey.
Another key finding was that 40 percent of traders polled are hedging their portfolios against risk by trading options. The majority said the reason for the shift was potential income generation or risk management.
The survey, conducted by broker Charles Schwab, also showed that 43 percent said they recently added more cash to their portfolio.
The sector that has the best sentiment is technology, with 36 percent of the 535 active traders and investors polled in February, saying they were bullish about prospects in the sector.
However, financial stocks fell out of favor. That sector saw the largest decline in sentiment, falling to 14 percent from 29 percent, despite significant gains and large profits posted by many big banks in 2010. Financials have been the third best-performing sector this year.
Notably, those feelings were registered ahead of the Goldman Sachs securities fraud scandal and the latest developments in the push for financial regulatory reform.
Continuing a trend from Schwab's prior survey, traders prefer the US market followed by emerging markets and Asia.