For a while, it seems that cannabis (marijuana) stocks are gonna be the next bubble trend in the stock market. Cannabis stocks like Canopy (CGC), Cronos (CRON), and Aurora Cannabis (ACB) just exploded.
And yet, the cannabis stock hype is on hold. As a matter of fact, the Marijuana North American stock index which constitutes the largest cannabis companies in the United States and Canada is trading at its lowest point in the past two years. Is it an opportunity?
Yes, it might be an opportunity. Cannabis stocks still have a huge potential as many states in the United States and countries around the world legalize marijuana for medical purposes. Moreover, the increased usage of CBD in various industries is another reason as to why these stocks might rise again.
Having said that, you should note that trading the marijuana (cannabis) index does not mean you have to necessarily buy the index, meaning you predict these stocks price will appreciate. When you are trading the marijuana (cannabis) index through CFDs or ETFs, you can also short (sell) the index, which basically allows you to make a profit when the price goes down.
You should note that there are many marijuana (cannabis) indices, which might be a bit confusing. Here are some of the main cannabis indices to follow:
How can you trade the marijuana(cannabis) index
Well, for those of you who are not US residents, the most convenient option to buy the marijuana index is one of the CFD providers. If you are not familiar with CFDs, you can read this guide – Trading CFDs – Good or Bad?
If you decide to buy the index through CFDs that also allows you to leverage your position, you can choose AvaTrade, which offers the cannabis stock index.
Another CFD provider that offers the cannabis stock index is Plus500, which offers the marijuana index as well as Cannabis Stock Index| BGCANG.
Trade the marijuana(cannabis) index in the United States
Unfortunately, CFDs are not legal in the United States. For US residents, the best way to trade the marijuana (cannabis) index is through one of the online trading and investment companies like ZacksTrade and AllyInvest.
Here are some of the most well-known cannabis index ETFs:
|Cambria Cannabis ETF||TOKE|
|Amplify Seymour Cannabis ET||CNBS|
|ETFMG Alternative Harvest ETF||MJ|
|Global X Cannabis ETF||POTX|
|AdvisorShares Pure Cannabis ETF||YOLO|
|Horizons Marijuana Life Science||
|Teucrium Emerging Medical Agriculture Index Fund||MEDA|
|Evolve Actively Managed Marijuana||TSX:SEED|
|AdvisorShares Vice ETF||ACT|
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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