Greetings and welcome to our website...

Buy put option s&p 500 vs dow


Buy put option s&p 500 vs dow


The easiest and most cost-effective avenue to trade the Dow Jones Industrial Average (DJIA) is through an exchange traded fund (ETF) (See: Strategies to trade the Dow Jones Industrial Average). One of the oldest ETFs is the SPDR Dow Jones Industrial Average ETF Trust ( DIA), which tracks the DJIA and seeks to provide investment results that correspond to the price and yield performance of the index.

The trading world has evolved at an exponential rate since the mid-1970s. Fueled in large part by the vast expansion of technological capabilities - and combined with the ability of financial firms and exchanges to create new products to address each new opportunity - investors and traders have at their disposal a vast array of trading vehicles and trading tools.

In the mid-1970s, the primary form of investment was simply to buy shares of an individual stock in hopes that it would outperform the broader market averages.Around this time, mutual funds started to become more widely available which allowed more individuals to invest in the stock and bond markets. Futures contracts with values based on the Dow Jones Industrial Average stock index allow traders to make leveraged bets concerning the future of the DJIA.

With buy put option s&p 500 vs dow futures trading, the leverage cuts both ways, so picking the wrong direction with a Dow futures trade can turn into a very expensive loser. Options on futures allow traders to set up trades with different risk profiles, changing the costs of a trade and putting a limit on the downside risk. Step 1Open an account with a registered commodity futures brokerage firm. This is available to all option traders who can short naked or uncovered puts.

NEW YORK ( TheStreet) -- It can be a winning strategy to sell uncovered or unhedged at-the-money short-term puts, then wait until maturity and repeat the trade. Investors comfortable with the risk of equities can beat the index in the long run by exploiting a flaw in the classical option theory. Note that with the levered strategy below you can theoretically lose more than the capital invested -- think about it carefully.




Buy put option s&p 500 vs dow

Buy put option s&p 500 vs dow

Buy put option s&p 500 vs dow