But if you can make the same amount of money - if not more - without fooling around with any of this, why bother? --Db
Well, like I said, I don't trade futures, so I am perhaps the wrong one to ask. But for me, by trading different stocks and different sectors, and being on both sides is my way of dealing with risk management. Everyone has their own style, and their own niche. I used to trade options exclusively. My risk management was a whole different thing in that case (I was on the floor). I could not do off the floor what I did on it. I wouldn't know how to truly manage risk if I traded mini-futures now. Other than to use stops. Which is not exactly my approach. And it certainly would never have worked with options. So it is what you are used to. Or what you develop and become comfortable with. Again, no right or wrong. The question was "why" and it is a subjective thing. I gave the answer that was the "why" for me. rs7
Stocks vs. Futures debate is much like choosing to learn to play the piano or guitar, Karate or Aikido. Choice based on personal psyche..but very cogent points raised by the proponents of either insturments are worth reading in old posts so start your search there.
I am confused. Aren't futures tax treatment way better than stocks? I am only asking because I have never traded a stock in my life.
I trade futures almost exclusively. However I keep a keen eye on about 20 or so stocks. Key off them. More and more I see reasons to pick out a particular equity for either a better outright move than the index or for a spreading opp. against futures. I used to pooh pooh the viability of SSF's, but I reckon I will be a participant. Can't beat those margins.
But I want to know why people daytrade stocks instead of futures. Is it really less risky than the futures? I'd bet it has to with understanding the overall market. From www.investorwords.com : futures A standardized, transferable, exchange-traded contract that requires delivery of a commodity, bond, currency, or stock index, at a specified price, on a specified future date. My guess is that a company stock is more tangible than something more esoteric like a future. I'd think you'd need to have a good handle on markets overall and how different indicators work, so you can trade off them confidently. Where's your edge in future? I'd be willing to wager that for many people (especially earlier in their trading) it's in thinking they can know a company better than an index or a commodity. Well enough, anyway, to cast a prediction they can act on.