US 500 - Standard and Poor's 500 Index

Standard and Poor's 500 is a stock index that tracks capitalization of the 500 stocks which represent major industries in American economy. The list of 500 firms is made up of stocks displayed and shown in NYSE and NASDAQ.

US 500 just like the Dow Jones Industrial Average Index is more volatile than most of the other Top Traded Index, The US 500 index will over the long-term trend upwards but it will have more price pullbacks and more consolidations than other stock index. Traders might prefer to trade other indexes other than this one if they are more accustomed to trading the more stellar trends that are found in the other top stock indices.

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

US 500 - Standard & Poors 500 Index

The US 500 Chart

US 500 trading chart is displayed and portrayed above. On the example shown above this trading instrument is referred to as as US500CASH. As a trader you want to find a broker that provides US 500 chart so that you as a trader can begin to trade it. Stock index example laid-out above is that of US 500 on MetaTrader 4 Platform.

Other Information about US 500 Index

Official Stock Index Symbol - US500

The 500 component stocks which make up the 0US-500 are picked from the major industries in US economy. The calculation of this index is however different compared to other Indices: the price components of the 500 stocks also has got a weighting factor that makes this stock index more volatile than others.

Trade Strategy for US 500 Index

US 500 technique/formula of calculating it makes it more volatile and hence there are more wide swings in the price movement of this stock index. Although this index in general moves upwards over the long-term because American economy also shows strong and robust growth & is also the biggest 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 trader you want to be biased & keep buying as the stock index moves upward. When America economy is doing well (majority of the times it is doing well) this upwards trend is more than likely to be ruling. A good index trade strategy would be to keep buying and buy the market dips.

During Economic Slow-Down & Recession

During economic slow-down and recession times, companies begin to report lower profits and lower growth prospects. It is because of this reason that investors begin to sell stocks of companies that are posting & recording lower profits and hence stock index keeping track of these specified stocks also will begin to go downward.

Therefore, during these market times, the market trends are much more likely to be heading and moviing down and as a trader you should also adjust your trade strategy accordingly to fit the prevailing downward trends of the stock market index that you're trading.

Contracts Specifications

Margin Requirement Per 1 Lot - $ 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 days the index might move in a range or even retrace, market retracement may also be significant some times & therefore as a trader you need to time your entry precisely when using this trade strategy: trade strategy & at the same time use proper equity management principles just in case of more unexpected volatility in the market. About money management rules in stock indexes trading topics: What's stock index money management & stock indexes trading money management methods.

Get More Lessons and Tutorials: