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

Standard and Poor's 500 is a stock index that tracks the capitalization of the 500 stocks which represent major industries in USA economy. The listing of 500 companies is made up of stocks displayed and shown 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 long-term trend upward but it will have more price pullbacks & more consolidations than other stock index. Traders might prefer to trade other stock index other than this one if they're more accustomed to trading the more stellar trends that are found in the other top indices.

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

US500 Strategy Course - US 500 Lesson Tutorial Strategy

The S and P 500 Chart

S&P 500 chart is displayed and illustrated and shown above. On the example shown above this trading instrument is known as as US500CASH. As a trader you want to find a broker who offers S&P 500 trading chart so that you as a trader can start to trade it. The example That is displayed above is that of S&P 500 on MT4 FX & Platform Software.

Other Information about S & P 500 Index

Official Stock Index Symbol - US:IND

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

Strategy for Trading/Transacting S & P 500 Index

S&P 500 technique/formula of calculating it makes it more volatile and therefore there are more wide swings in price movement of this index. Although this index in general moves upwards over the long term because USA economy also shows strong and robust growth & is also the largest economy in the globe.

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

As a indexes trader you want to be biased and keep on buying as the index moves upward. When America economic & business environment is doing well and good (most of the times it is doing well) this upward market trend is much more likely to be the one present. A good stock index trade strategy would be to buy the market dips.

During Economic Slow-Down & Recession

During economic slow down recession periods, companies start reporting slower earnings and revenues, slower profits & lower business growth forecast. It is because of this reason that traders start & begin to sell stocks/shares of companies that are posting & recording lower profits & hence index tracking these particular stocks will also start to move downwards.

Therefore, during these times, market trends are much more likely to be moving downward & as a trader you should also adjust your trading strategy accordingly to fit the current downwards trends of the stock market index which you are trading.

Contracts and Specs

Margin Requirement for 1 Lot/Contract - $ 12

Value per 1 Pip(Point) - $ 0.1

NB: Even though general trend is in general moves upward, as a stock indices trader you've got to factor in daily market volatility, on some of the trading days the index may oscillate & move in a sideways range bound move or even pullback/retrace, retracement may also be significant some times and hence you as the trader you need to time your entry precisely when using this trade strategy: Stock Index trade strategy & at the same time use the appropriate and proper/appropriate money management guidelines & methods in case there is more unexpected volatility in the market. About equity management guidelines/techniques in index lessons: What's money stock indices management and indices funds management techniques.

More Topics: