Stocks or futures

[millermandil]

Risk aside, which is more profitable to trade in...stocks or futures? Since I'm a complete beginner, can anybody recommend any commodities to look out for in the US market, both good and bad, for my own personal education and study?

Thanks

 

[nikoschopen]

defenitely, futures...BUT the caveat is that it could also be that much un-profitable if you slip & fall

 

[Trader333]

defenitely, futures...BUT the caveat is that it could also be that much un-profitable if you slip & fall

What is the basis for this assumption ? If you trade Nasdaq stocks the opportunity for profit is as great as futures if not even greater because on days when the futures markets are flat there are always Nasdaq stocks making good moves to profit from.


Paul

 

[nazzdack]

The winner is.............FUTURES!

(1) Futures trade nearly 24/7. You have more time to trade. (2) Short-selling is easier with futures. (3) There's a smaller universe of futures worthy of attention. This is easier to monitor compared to thousands of stocks. (4) Futures have better tax treatment than stocks. (5) Feel free to stop me........................

 

[TWI]

What is a stock?

 

[Trader333]

Nazzdack,

1) Futures trade nearly 24/7. You have more time to trade.

Outside of market hours the futures liquidity is generally poor with wide spreads therefore making profit outside these hours is extremely difficult.

(2) Short-selling is easier with futures.

Agreed to a point but this depends upon which stocks are traded and if you have the right portfolio shorting is rarely a problem

(3) There's a smaller universe of futures worthy of attention. This is easier to monitor compared to thousands of stocks.

Completely disagree with this, I have around 140 stocks in my portfolio and being alerted to setups is easy. You also have the advantage of using Level II which is not the same for futures.

Futures have better tax treatment than stocks.

I trade from the UK and have no knowledge of any preferential tax treament for futures here, it may be different in the US ?

In the end it is down to personal choice but I have found trading stocks to be much more prfoitable and easier than trading futures.


Paul

 

[BannRonn]

Risk aside, which is more profitable to trade in...stocks or futures? Since I'm a complete beginner, can anybody recommend any commodities to look out for in the US market, both good and bad, for my own personal education and study?

Thanks

millermandil,
Profitability wise, I would say they have the same potential. Futures however work on higher leverage than Stocks (unless you go on full margin) so small movements in contract value lead to higher profit/loss.

The E-minis (S&P 500 and Nasdaq100) are good liquid contracts that you can explore in the US markets. They trade about 23+ hours on trading days and are virtually accessible worldwide thru Globex. You can read this Guide to choosing a Futures Contract for Trading to get a better idea on what you need.

 

[nazzdack]

Trader$$$

Arnold, Your points are on-the-money. (1) Regarding trading hours, It's possible to trade the German contracts and then switch to the eMini's & US 10-year Note. It makes for a long day but it captures the best liquidity. (2) In the US, futures are taxed at 28%, stocks @~40%. (3) Futures don't require an uptick to short-sell. You can pile-on when the market hits an "air pocket". (4) If you can follow 140 stocks, more power to you. 20 is my limit.

 

[millermandil]

Thank you everyone for replying. Much appreciated.