And volatility is the options trader's best friend. Volatility simply means movement. Catch a 200-point move like that and you could double your money. Another reason to trade the NDX is the price of the contracts. As an individual trader, you rarely have to buy more than one contract.
Expensive contracts attract the big money, the smart money.
Institutional traders don't make a whole lot of mistakes. But if you pick your entry points right, the rewards can be fantastic. There are margin requirements for writing naked options. Index options are always naked . You should find out what your broker's margin requirements are, because there will be times when we recommend writing NDX options.