Stock Index

  ETF Futures Mutual Funds
Symbol SPY ES VFNIX
Margin
requirements per $10K/notional value		 $5,000 $3,000 $10,000
Commission Yes Yes No
$Value of 1 ticket ($10 K base) $.79 $12.50 $.86
Advantages 1) Allows one trade access to a fully diversified basket of S&P stocks

2) Very Low
transaction costs (bid/ask spread is 1 penny)

3) Tremendous liquidity

 1) Lower margin requirements

2) Access to
electronic platform that trades after hours

3) Instant
Execution

 

 1) Extremely low transaction costs (18 basis point)
Disadvantages 1) High Margin Requirements and interest rate costs

2) Liquidity low outside market hours

3) Need up tick to short

 

 1) High Leverage provides large risk per tick 1) No leverage at all

2) No short selling

 

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