No Intraday Trading

• The current value of a mutual fund can only be determined at the end of the trading day when the prices of all the individual stocks in its portfolio are settled. Unlike individual stocks, which can be bought and sold throughout the trading day, mutual funds can only be bought and sold at the end of the day when their price is calculated.
  
  

No Stop-Loss Orders

• With individual stocks, you can decide how much loss you are willing to accept if the market turns against you by placing a stop-loss order, which instructs your broker to automatically sell your shares if at any point in the trading day the price of the stock falls to the point at which you wish to cash out. Mutual fund values cannot be protected by stop-loss orders.
  
  

No Options

• Options allow investors to buy an individual stock at a specific price on or before a specific date. Options give investors the benefit of paying a small premium for the right to purchase shares of a stock at a discount if the shares rise in value during the option period. Investors cannot purchase shares of a mutual fund using options.
  
  

No Margin

• Buying stocks on margin means borrowing money from your stock broker to finance part of the purchase. If you want to buy 100 shares of a stock costing $50 a share and you only have $2,500 of the $5,000 cost, you can borrow the other $2,500 from your broker using margin. If the price rises to $60 a share, making the stock worth $6,000, you could repay the broker's $2,500, earning $1,500 in profit. Mutual funds, however, cannot be bought on margin.