Maybe you’re stock trading or investment for quite a while and are trying to find new opportunities.
Have you considered index options? They’re not only for institutional investors anymore.
The truth is, many retail equity options traders will make a straightforward transition to Mini S&P 500 and Mini Russell 2000 Index options. That is because they may be smaller versions of the equivalent standard index options contracts. At 1/10th the dimensions of the standard contracts, Mini Index options allow retail traders to realize broad market exposure and execute trading strategies with less capital.
5 Good reasons to Trade Index Options
Index options may help traders diversify a portfolio and gain broad exposure with (generally) one trade. In comparison with single stocks, index options reduce the chance of experiencing a spot move which help narrow the main focus to showcase risk as opposed to individual company risks.
Index options tend to have lower volatility than options on individual stocks. Volatility around earnings reports, mergers, and other news events could have a significant effect on commodity prices. But with index options, those volatile moves tend to erase.
Index choices European style, meaning they cannot be exercised before expiration. Equity options, however, can be exercised anytime. Share settle to shares in the underlying stock, while index options settle to cash.
Index options typically qualify for the 60% long-term, 40% short-term capital gains tax treatment.*
Index options usually have narrower bid/ask spreads than single-stock options due to greater liquidity.
To get more information about indexfonds kaufen visit our site: read here