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

The Standard & Poor's 500 Index is a Indices that keeps track of the capitalization of the 5 hundred stocks that represent major industries in US economy. The listing of 500 companies is made up of stocks shown & displayed in NYSE & 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 might 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 index has more oscillations than other stock indexes is because it has more constituent stocks than other indexes. This Index also has got a weighting component 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 & shown above. On the above example illustration this financial and trading instrument is named US 500CASH. As a trader you want to find a broker that provides 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 Stock 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 constituent of the 500 stocks also has got a weighting component 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 and 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 and is also the largest economy in the world.

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

As a trader you want to be biased & keep buying as the stock index moves upwards. When US economy is performing good (most of the times it's performing good) 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 slow-down and recession times, companies start to report lower profits and lower growth prospect. It is due to this reason that investors start to sell stocks of companies which are announcing and recording lower profits & therefore Index tracking these specific stocks will also begin to move downward.

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 suit the prevailing downwards trends of the index which you as a trader are trading.

Contracts & Specifications

Margin Requirement Per 1 Lot - $ 12 dollars

Value per Pip - $0.1

Note: Even though overall trend is generally moves upward, as a trader you've got to consider & factor in daily price volatility, on some of the days the Indices may move in a range or even retrace & 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: indices 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 is stock index money management guidelines & strategies & Indices equity management methods.

Study More Tutorials and Courses: