SPX 500 - Standard and Poor's 500 Stock Index

Standard and Poor's 500 is a index that tracks capitalization of 500 stocks that represent major industries in American economy. The listing of 500 companies is made up of stocks displayed in NYSE and NASDAQ.

The SPX 500 just like the Dow Jones Industry Average Stock Index is more volatile than most of the other Top Traded Index, The SPX 500 stock index will over the long term trend upwards but it'll have more pull backs & more consolidations than other stock index. Traders may prefer to trade other stock indexes other than this one if they are 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 constituent stocks than other stock indexes. This index also has weighting component in its calculation which also contributes to making the stock index more volatile.

SPX 500 Stock Indices Guide - SP500 Trtading Strategy

The SPX 500 Chart

The SPX 500 trade chart is displayed and shown and displayed above. On the example above this instrument is referred to as as US500CASH. As a trader you want to find a broker that provides SPX 500 trade chart so that you as a trader can start to trade it. Example displayed above is of SPX500 on MT4 Software.

Other Information about SPX 500 Index

Official Symbol - SPX:IND

The 500 constituent stocks which constitute SPX500 are selected from the major industries in US economy. The calculation of this index is however different compared to other Indices: the price constituent of the 500 stocks also has a weighting component that makes this stock index more volatile than others.

Trade System for SPX 500 Index

SPX 500 method of calculating makes it more volatile and therefore there are much more wider swings in the price movement of this index. Although this stock index generally move upward over the long term because US economy also shows strong growth and 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 America economy is performing good (most times it's performing good) this upward trend is more likely to be in-favor. A good stock indices trade strategy would be to buy to buy the dips.

During Economic Slow-Down and Recession

During economic slow-down & recession times, companies start to report lower profits & lower business growth prospects. It is due to this reason that traders begin to sell stocks of companies which arereporting lower profits & therefore stock index tracking these particular stocks also will begin to move downward.

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

Contracts Details

Margin Requirement for 1 Lot - $ 12

Value per 1Pip - $ 0.1

NB: Even though general trend is generally move upwards, as a stock indices trader you have to factor in daily market volatility, on some days the stock index may oscillate or even retrace, market pull back might also be substantial at times & hence as a trader you need to time your trade entry precisely using this strategy: trade strategy and at the same time use proper money management rules just in case of more unexpected volatility in the market movement. About equity management principles courses: What is equity management & stock indexes equity management methods.

Get More Lessons and Courses: