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COSMIC:
Stock
index futures are used for hedging, spreading &
speculating. Hedging using stock index futures involves
hedging against a stock portfolio or equity index
options.
Generally, we are speculators avoiding stock because of huge capital requirements.
Instead, we trade Stock Index Futures, generally,
The Russell 2000.
We believe this Index Future allows us to enter into
positions near established support [buy] or resistance
[sell] points.
Holding periods range from 3 hours to 3 days.
However, the typical holding period for The
COSMIC Speculator is a few days. To populate The COSMIC Speculator we analyze daily, weekly, monthly charts
to collect inflection areas, not specific points, and
then apply propriety indicators to pinpoint estimated
entry levels and exit targets together with stop loss in
event our trade wanders.
The main U.S.
index is the Russell 3000 Index, which is divided
into several sub-indexes, including the well-known
small-cap Russell 2000 Index, the bottom 2,000
(the smallest companies) make up the small-cap Russell
2000. It’s this Russell 2000 iFuture that we favor and
trade from the
New York
open during only the 1st 2 hours.
Trading using stock index futures involves volatility
(the greater the volatility, the greater the likelihood
of rapid reward – usually taking relatively small but
regular rewards. Volatility
can work against a trader in that it can also result in
a rapid loss of funds.
Investing via Stock Index Futures
involves exposure to a market or sector without having
to actually purchase shares directly.
The S&P 500 is the stock index containing the
stocks of 500 Large-Cap corporations.
The index is the most
notable of the many indices owned and maintained by
Standard & Poor's. After
the Dow Jones Industrial Average,
the S&P 500
is the most widely watched and traded index. It is
considered to be a bellwether
for the
US
economy.
But
we have learned that, while the S&P
500 is more popular, we consider the Russell
2000 to be a better trading vehicle. The Russell's
family of global equity indexes, including the
industry-leading
U.S.
equity indexes, allows investors to track the
performance of distinct market segments worldwide.
But we
have learned that, while the S&P
500 is the most popular, the Russell
2000 is a better trading vehicle. The Russell's family
of global equity indexes, including the industry-leading
U.S.
equity indexes, allows investors to track the
performance of distinct market segments worldwide.
And, the price per point is $100, where the eMini
S&P is only $50.
Since both Index Futures move in tandem… one
follows the other, why
not trade the higher price spread!
Many investment
managers use the Russell Indexes as benchmarks to
measure their own performance. Russell's innovative
index design has led to more assets benchmarked to its
U.S.
index family than all other
U.S.
equity indexes combined. As of May 2007, Russell's
indexes had US$4 trillion in assets benchmarked to them.
Equity index futures and options
tend to trade in liquid markets and deliver in cash.
Indices for futures are well-established: S&P,
Russell, FTSE
]British], DAX
[German], CAC40
[French] and other G12
country indices.
DISCLOSURE:
The
High Degree of Leverage Often Obtainable in Commodity
Trading Can Work against You As well As for You. Use of
Leverage Can Lead To Large Losses As Well As Gains.
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