S and P 500 - Standard & Poor's 500 Stock Index

Standard & Poor's 500 is a stock index that tracks capitalization of 500 stocks that represent major industries in USA economy. The list of 500 corporations is made up of stocks illustrated in NYSE and NASDAQ.

S&P 500 just like the Dow Jones Industrial Average Stock Index is more volatile than most of the other Top Indices, The S&P 500 index will over the longterm trend upwards but it'll have more price retracements and more consolidations than other stock index. Traders might prefer to trade other index other than this one if they're more accustomed to trading the more stellar trends which are found in other top stock indices.

One of the reason this index has more oscillations than other stock index is because it has more constituent stocks than other index. This stock index also has a weighting component in its calculation which contributes to making it more volatile.

Standard & Poors 500 Index

The S and P 500 Trade Chart

S&P 500 chart is illustrated and shown & displayed above. On example above this instrument is named as US500CASH. As a trader you want to find a broker that provides S&P 500 chart so that you as a trader can begin to trade it. The example Which is illustrated above is that one of S&P 500 on MT4 Forex & Stock Indices Platform.

Other Info about S & P 500 Stock Index

Official Index Symbol - SP:IND

The 500 constituent stocks that make up the S&P 500 are picked from the major industries in USA economy. The calculation of this index is however different compared to other Indices: the price component of the 500 stocks also has a weighting component that makes this stock index more volatile than others.

Strategy to Trading S and P 500 Stock Index

S&P 500 manner of calculating makes it more volatile and hence there are wider swings in price movement of this index. Although this stock index generally moves upward over the longterm because USA economy also shows strong growth & is also the largest economy in the world.

As a trader wanting to trade this index, be prepared for wider price swing & a little more volatility.

As a trader you want to be biased & keep buying as the stock index moves upwards. When USA economy is performing well (most times it's performing good) this upward trend is more likely to be in place. A good stock index trade strategy would be to buy dips.

During Economic Slow-Down & Recession

During economic slow-down and recession times, corporations start to report lower profits and lower business growth prospects. It's due to this reason that traders start to sell stocks of corporations that arereporting lower profits and hence index tracking these particular stocks will also start to move downward.

Hence, during these times, market trends are likely to be moving downward and as a trader you should also adjust your trading strategy accordingly to fit the prevailing downwards trends of the stock market index that you are trading.

Contracts and Details

Margin Requirement Per 1 Lot - $ 12 dollars

Value per 1 Pip - $0.1 dollars

NB: Even though general trend is generally moves upwards, as a stock indices trader you have to factor in daily market volatility, on some days the index might move in a range or even pullback, market pullbackretracement may also be significant at times and therefore as a trader you need to mark-time your entry precisely using this trading strategy: Stock Indices trade strategy & at the same time use proper equity management principles just in case of more unexpected volatility in the market trend. About equity management principles in stock index lessons: What's equity management and equity management strategies.

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