SP 500 - Standard and Poor's 500 Index

Standard & 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 corporations is made up of stocks illustrated & displayed in NYSE & NASDAQ.

The SP 500 just like the Dow Jones Industry Average Index is more volatile than most of the other Top Traded Index, The SP 500 index will over the long term trend upwards but it'll have more pull backs & more consolidations than other stock index. Traders may & might prefer to trade other stock indices other than this one if they're more accustomed to trading the more stellar trends found in other top indices.

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

SP 500 Index - SP 500 Index Defined

The SP 500 Chart

The SP 500 trade chart is displayed and illustrated & shown & displayed above. On example put on display above this instrument is named as US500CASH. As a trader you want to find a broker that provides SP500 Index chart so that as you as a trader can start & begin to trade it. Stock indices example illustration displayed above is of SP 500 on MT4 Software Platform.

Other Information about SP 500 Index

Index Symbol - SP 500:IND

The 500 component stocks which constitute SP500 are chosen from the major industries in US economy. The calculation of this index is however different compared to other Indices: the price component of the 500 stocks also has got a weighting component/constituent that makes this stock index more volatile than others.

Strategy of Trading SP500 Index

SP 500 recipe of calculating it makes it more volatile and thence there are much more wider swings in the price movement of this stock index. Although this index generally moves upward over the long-term because US economy also shows strong and robust growth and is also the biggest economy in the globe.

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

As a index trader you want to be biased and keep on buying as the index moves upwards. When America economy is doing good (most times it is performing good) this upwards market trend is more than likely to be the one that is ongoing. A good indices strategy would be to buy dips.

During Economic Slow Down and Recession

During economic slow down & recession periods, companies begin reporting lower earnings, lower profits & lowers growth prospects. It is due to this reason that traders start to sell stocks/shares of companies which are reporting and recording lower profits & therefore index tracking these particular stocks will also start to move downwards.

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

Contracts & Details

Margin Requirement per 1 Lot - $ 12

Value per 1 Pip(Point) - $ 0.1

NB: Even though general trend is in general moves upwards, as a stock indices trader you've got to factor in daily market volatility, on some of the days the index may oscillate or even retrace, market pull back may also be substantial sometimes and therefore you as a trader you need to time your entry precisely using this trading strategy: trading strategy & at the same time use proper/suitable money management guidelines/strategies just in case of more unexpected volatility in the market movement. About equity management methods and guidelines in index topics: What is stock index equity management and stock index money management plan/system.

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