Looks like the day-traders are starting to hijack the markets big time. This was to be expected, as more and more stocks can be
As GLOBALIZATION SETS IN, and access is available to more and more markets worldwide.
Following is by Jeff Kohler (Fun With Stock Index Futures):
"As market volatility increases, opportunities emerge for short-term investors who want to take advantage of large, daily price swings. Day traders flourish in volatile markets, but many long-term investors cringe at the thought of how their portfolios will react to these conditions. While shortening your time frame can help maximize profits and minimize risk in these conditions, it is also imperative to find the most suitable product for your investment needs.
Investors can use many vehicles to trade daily price movements. The most popular instruments for day trading include stock, option and futures contracts.
When trading stocks, investors don't worry about time decay, wide spreads or inflated prices due to market conditions. However, depending on the underlying stock, this is an expensive way to capitalize on price swings. Another disadvantage is the lack of leverage. Using margin, the leverage obtained (4:1) is a lot less than that offered by option or futures contracts.
Many investors choose options as their primary trading vehicle, because leverage is an important characteristic of day trading. However, during times of high market volatility, option premiums are increasingly expensive and less attractive to purchase. If you purchase overpriced premiums to leverage sharp market movements, changes in volatility may still create a losing position, even when you are right about market direction. "
SCARED ? WELL, THESE ARE UNCERTAIN TIMES......AND EVEN THE LONG-TERM INVESTOR SHOULD SPEND AT LEAST A COUPLE OF HOURS STUDYING THE MARKET TRENDS.
