Investors can buy put and call options on stock indexes, such as the Dow Jones Industrial Average and the Standard & Poor's 500.

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By 2010, there were over 3,600 individual equity options traded on the options exchanges. The securities traded have expanded from individual common stocks to include options on stock indexes such as the Nasdaq 100, the Dow Jones Industrial Average and the Standard & Poor's 500 Indexes. The ability to buy and sell options on indexes provides a good hedging strategy for portfolio managers, and it allows individual traders to speculate on market movements.

Investors Can Buy Put and Call Options on Stock Indexes