Index Vs Stock Trading

It is over advertised by various brokerage houses that Index trading is more fruitful compare to stock ….., Traders thinks……Index trading is easy……it is less risky ……i.e. stock can break or rise 5-10% in a day whereas the Index hardily moves 2-3%.....One more thinking came from some advance traders…….stock can be manipulated by operators…..big players but Index can’t…….they consider profit/loss in percentage form and not in amount…….

Well…….I don’t have any reason to refuse or accept their views…….I have some different opinion ……and in my opinion ……..Index Trading could be more harm-full compare to stock…….

There is a mental aspect……if you get an offer to sell a product at commission of 1%......most probably you will ignore but if you know that 1% is equal to 1000 Rs. Then ……..?

The same aspect works here…….. 2-3% is lower than 5-6%.........??


Just consider any heavyweight……if a stock like Reliance or LT broken 5% trader lose approximately 100-150 Rs whereas if Index break just half i.e.2-3% Trader lose equal amount……..

Now we comes to other point…….Index can not be manipulated……. Well…..just drive 4-5 heveyweight like Reliance, Bhel, HDFC, LT and watch where the Index goes……these 4-5 stocks can pull the Index 2% higher whereas the other stocks could be kissing the earth............

This is corporate time…….FIIs, DIIs, Mutual Funds normally know what the other will do next day…….in some cases …..Profit or Loss is pre-decided between them…….so who actually lose……?

An other reason that force me to think………in stock…..one or two operators/forces could be interested at one time……but because Index is based on 30-50 stocks……so various players force it to move in either direction…….and it become too volatile……