Difference between stocks and indices
A modified capitalization-weighted index is a hybrid between capitalization weighting and equal weighting. It is similar to a capitalization weighting with one main difference: the largest stocks are capped to a percent of the weight of the total stock index and the excess weight will be redistributed equally amongst the stocks under that cap. 8. 8 Arbitrageurs: Trade in Two or more different Markets Either its Same Security or Similar Security or Currency or Commodity Profits by Simultaneously Buying and Selling Take advantage of Pricing difference created by Market Condition 9. 9 Hedgers: Trade in Two Here, we look at the difference between stocks and bonds on the most fundamental level. Stocks Are Ownership Stakes; Bonds are Debt Stocks and bonds represent two different ways for an entity to raise money to fund or expand their operations.