Search engine for touristic excursions to any place in the world Maybe you’re stock market trading or share for quite a while and therefore are looking for new opportunities.
Have you considered index options? They are not only for institutional investors anymore.
Actually, many retail equity options traders can make a simple transition to Mini S&P 500 and Mini Russell 2000 Index options. That’s because they may be smaller versions from the equivalent standard index options contracts. At 1/10th how big is the common contracts, Mini Index options allow retail traders to achieve broad market exposure and execute trading strategies with less capital.
5 Top reasons to Trade Index Options
Index options might help traders diversify a portfolio and gain broad exposure with (in most cases) one trade. When compared with single stocks, index options lessen the probability of experiencing a space move which help narrow the main objective to market risk rather than individual company risks.
Index options generally have lower volatility than alternatives on individual stocks. Volatility around earnings reports, mergers, as well as other news events will have a significant effect on share prices. However with index options, those volatile moves tend to erase.
Index option is European style, meaning they can’t be exercised before expiration. Equity options, on the other hand, could be exercised anytime. Share settle to shares from the underlying stock, while index options settle to cash.
Index options typically entitled to the 60% long-term, 40% short-term capital gains tax treatment.*
Index options frequently have narrower bid/ask spreads than single-stock options due to greater liquidity.
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