|
|
|
Why to Trade Indexes?
- Less Capital Investment:
You won't need to purchase a mutual fund or an assemblage
of stocks to get good performance from an index. You can buy the index
directly as easily as a stock, with low commissions, and no need to
worry about load!
- Less Volatility: By
their nature the indexes are much less volatile than the stocks they
represent, as they are an 'average' of many stocks. Therefore one
doesn't need to worry about the news and fluctuations of many individual
stocks.
- Many Derivatives: When
trading an index, you not only get the ability to trade index share (
SPDRs, QQQQ, Diamonds) but you can also trade index options and index
futures. Index options and futures carry far more risk, and of course
more gain, but are not as volatile as an individual stock.
|
|