NYSE Composite Index
What is the NYSE Composite Index?
The NYSE Composite is an index which is made up of over 2000 stocks with approximately 1600 from America and the rest are made up of international listings. The NYSE Composite also covers all common stock on the New York Stock Exchange, American depositary receipts, real estate investment trusts and tracking stocks.
Uses of the NYSE Composite Index
The NYSE Composite gives an investor or investment manager an understanding of the performance of diverse range of stocks across multiple countries.
This index can be used to hedge long and short positions held in a portfolio by using either futures or option contracts.
Risks of the NYSE Composite Index
All futures contracts will feature the same risk through the direction in which you anticipate the contract to rise or fall. If you anticipate a currency to increase in value and it ends up falling in value. The long position that you hold will also fall in value.
With any index it is susceptible to the performance of the underlying stock. If the underlying securities are performing poorly then a decrease in the index is more than likely to be expected.