The OEX is a subset of the S&P 500 Index. The OEX has 100 of the top stocks from diverse industry groups. These blue chip stocks is a good measure of the market’s overall performance. OEX is the ticker symbol for the S&P 100 Index. Investing in the OEX is much safer than investing in individual stocks. It can be cheaper too, than trying to invest in several individual stocks. The reason that it is safer, is because you have 100 companies instead of one. If one company in the OEX goes bankrupt or just goes under. Then it’s only affecting a very small portion of your investment. If you had just bought the company that went under. Then you would have to take all the loses head on. The OEX is a great way to diversify a portfolio.
Now trading stock options can also have other benefits. Trading OEX options requires less capital than trading the options of individual stocks. It can give you more room to leverarge better too. OEX options will try to teach you about the position sizing so you don’t make the common mistake of investing too much in a few trades. They will also help you to learn traders methods, rules, and approach.
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