Stock futures or index futures which one is more beneficial for trading
Investor can trade the maximum part of stock market by buying index futures instead of buying individual stock futures with the efficiency of A risk diversification some advantages of trading in index futures in comparison stock futures-
– The contracts are highly liquid.– Index futures provide higher leverage than any other stocks.– It has lower risk than stock futures.– Easy to trade long side and short side.
– Study on index movement which one depend more than one stocks but in stock futures only study in one stocks.– Index less volatile than single stocks.
– Some cases we can use index futures as a hedge for a portfolio exposure with correlation between index and portfolio.– Diversified, hard to manipulate, lesser margin, broader economic call, application of technical analysis.