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Friday Afternoon Open

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John Neverbend9/04/2009 5:16:54 pm PDT

re: #897 Bagua

True, but then Options, Stocks, ETFs, etc. are all not for the faint-hearted and full of risks. The question is more the speed of the decline.

It’s also a function of leverage, at least as far as futures and options are concerned. A single futures contract will often cover a far larger investment than an individual investor would contemplate buying. The futures exchange may permit trading on margin, but then you have to contend with margin calls which could wipe out a small investor. ETFs will not suffer from this problem, as any futures are fully collateralized.