Stock indices futures are known for their volatility, however trading index options may be a more manageable alternative for the average trader.
Highly leveraged futures contracts are available in all of the major indices. Perhaps the most popular being the Dow, Nasdaq and S&P 500. Similar to mutual funds, trading indices offer stock traders instant diversity. Traders can profit from an increase or decrease in the overall equity market as opposed to trying to pick individual stocks.
However, the volatility and leverage involved with stock index futures prove to be unmanageable for many traders. For this reason, traders may find that options are the ideal instrument for index trading.
Range Trading
Because the stock market can be...
