I wanted to get a gauge on what the most popular trading instruments were and by what proportions. I know there are people who trade several instruments, but just enter what you trade predominantly or what you specialize in.
According to my broker, most people are into stocks and index futures. Why is that? Is it because of high liquidity?
Option puts on stocks for me. I like the ability of not being able to lose more than I invested (I only buy them not write them) and being able to hold my position through a whipsaw. Also not being marked to market daily is a plus as well.
How do you define popularity? Traded volume? In this case it's currencies. http://en.wikipedia.org/wiki/Foreign_exchange_market "The FX market is the largest and most liquid financial market in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global forex and related markets is continously growing and was last reported to be over US$ 4 trillion in April 2007 by the Bank for International Settlement."
Sorry for the ambiguity. By "popularity" I mean the number of individuals who are trading the instrument. I'm not so interested in what the hedge/mutual funds and prop firms are trading, more the individual trader. I would think that exchange trading volumes would be too strongly influenced by the big players.
you cannot assume anything. the large outfits trade baskets of many things. Institutions hedge/sell/buy grains, precious metals and petroleum products, small cap, large cap, international and domestic, bonds and notes, just like the individuals. you are best off sticking with exchange volume, and not trying to get the opinions of 5 or 6 people.
But its the people I want to know about. According to exchange volumes, FOREX is the most popular trading instrument, but that doesn't mean there are more FOREX traders than S&P traders. It just means that FOREX is traded in higher volume.