To The Moon

U.S. stocks are famous for long bull and slow bull. The time of sharp decline is always violent and short.

At the beginning of 2022, when the Fed's expectation of raising interest rates was about to be fulfilled, US stocks fell sharply. At this time, Buffett's others feared that I was greedy, which always made investors ready to move and wanted to copy the bottom of US stocks.

What are the ways to copy the bottom?

1. Buy Index ETF

There are two well-known indexes of US stocks, namely$( SPX)$, $(S&P500)$ index, or S&P 500 index. Because it contains a great variety of companies, it is considered to be an excellent benchmark to measure the performance of the stock market.

The other is the NASDAQ Composite Index ($(ixic)$), which includes almost all stocks listed on the Nasdaq Stock Exchange, which is more comprehensive than the S & P 500.

However, the index cannot be used for direct trading. Market participants can only make profits by trading ETFs (such as spy) or futures (such as ES) with SPX as the subject, or trading options with SPX as the subject.

Spy is an ETF, which aims to replicate the rise and fall of SPX market and give investors a simple and low-cost financial instrument to invest in the S & P 500. Spy's option market is one of the most traded varieties in the world.

Qqq fluctuates in the same direction as the Nasdaq 100 index, and the fluctuation range is about the same. For example, the Nasdaq 100 index rose by 1%, and the corresponding qqq also rose by about 1%.

The 100 constituent stocks of the Nasdaq 100 index have the characteristics of high technology, high growth and non-financial. It can be said that they are the representatives of American technology stocks.

Spy and qqq have no leverage. Friends who like it can consider 2 / 3 times leverage to long related ETFs.

2. Purchase of stock index futures

The underlying asset of e-mini S & P 500 futures is the S & P 500 index, which is widely regarded as the benchmark of U.S. stocks. When the S & P 500 index rises, e-mini S & P 500 index futures will also rise.

The trading code of e-mini S & P 500 futures is "es", and its nominal trading amount is far greater than spy, and even greater than the nominal trading volume of all stocks of S & P 500. Es trades for 23 hours a day and has excellent liquidity, making it a priority for global investors.

The Nasdaq 100 index is a broad-based capital weighted index that tracks the movements of 100 large cap stocks from major industries. NQ futures is one of the most efficient and cost-effective tools for investors to obtain the risk exposure of Nasdaq 100 index.

3. Buy stock index option

SPX, spy and es all have corresponding options, which are mainly different in the exercise method:

The option of e-mini (ES) is European option (the option expiring every quarter is American), and the buyer cannot exercise the option in advance; The contract size is $50, the spot right price changes by $1, and the profit and loss is $50; The delivery method is spot delivery, that is, when the option expires, if your option is an in price option, you will get the corresponding es futures contract position at the option execution price.

$(SPX)$ option is also a European option, that is, the buyer cannot exercise in advance; The contract size is $100, the spot right price changes by $1, and the profit and loss is $100; The delivery method is cash delivery, which means that the underlying delivery price determines your option profit and loss, and cash is directly transferred into or out of your account according to the profit and loss.

For example, if you buy 3900 calls for $10 and the SPX is 3950 when the option expires, you will directly receive a profit (3950-3900-10) * 100 = $4000

The spy option is an American option, and the buyer can exercise it in advance; Because spy has dividends, the probability of exercising in-depth options is not small before dividends. The contract size of spy is $10, which means that the option price changes by $1 and the profit and loss is $10. Like stock and futures options, spy options are spot delivery, that is, when the option expires, if your option is an in price option, you will get the stock position at the option execution price.