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

The Standard & Poor's 500 Index is a Stock Indices that keeps track of the capitalization of the 5 hundred stocks that represent major industries in US economy. The list of 500 companies is made up of stocks shown & displayed in NYSE and NASDAQ.

The S&P 500 just like the Dow Jones Industry Average Index is much more volatile than many of the other Top Stock Index, The S&P 500 index will over long term trend upwards but it will have more pull backs and more consolidations than other Indices. Traders may prefer to trade other indexes other than this one if they are more used to trading the more stellar and robust trends found in the other top stock 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 got a weighting constituent in its calculation which contributes to making the index more volatile.

S&P 500 Spx 500 Meaning - How to Trade the S&P 500 Stock Index

The S & P 500 Index Chart

The S&P 500 chart is displayed and shown above. On the above example illustration this financial and trading instrument is named US 500CASH. As a trader you want to look for & find a broker that offers S&P 500 chart so that you as a trader can start to trade it. Example displayed and illustrated above is of S&P 500 Indices on MT4 Forex Platform Software.

Other Details about S & P 500 Index

Official Symbol - SPX:IND

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

Strategy for Trading/Transacting S & P 500 Stock Index

The S&P 500 Index approach of calculation makes it more volatile & therefore there are much wider swings(more volatile swings) in price movement of this stock index. Although this stock index in general moves upward over long-term because US economy also shows strong growth & is also the biggest economy in the world.

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

As a stock index trader you want to be biased and keep on buying as the index heads & moves upwards. When US economy is performing good (most of the times it is doing well) this upward trend is much more likely to be the one present. A good stock indices strategy would be to buy price dips.

During Economic Slow-Down & Recession

During economic slowdown and recession periods, corporations start and begin to report slower earnings, slower profits and lowers growth projections. It is due to and because of this reason that traders start to sell stocks of companies which are announcing and recording lower profits & therefore Index tracking these specific stocks will also begin to move downwards.

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

Contracts & Specifications

Margin Requirement Per 1 Contract - $ 12 dollars

Value per Pip - $0.1

Note: Even though overall trend is generally moves upward, as a trader you've got to consider and factor on daily price volatility, on some of the days the Indices might move in a range or even retrace and retracement, the market retracement move might also be a substantial one at times and hence you as a trader you need to time your trade entry strictly when using this trading strategy: indexes strategy & at the same time use suitable and appropriate and appropriate and proper money management guidelines and techniques just in case of more unexpected volatility in the market. About equity money management methods in indices tutorials: What's stock index money management guidelines & strategies & Indices money management methods.

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