SPX

S&P 500

The S&P 500 is a stock market index that tracks the stocks of 500 large US companies. It reveals the performance of the stock market by risks and revenues of these companies.

Traders use this index as a benchmark of the entire American market. S&P stands for Standard and Poor, the names of the two founding financial companies. It’s the one of the oldest and most well-known stock indexes in the world.

The S&P 500 is based on the market capitalization of the companies. The market cap or the market capitalization is the total sum of all shares of stock that a company has issued. For example, a company with 20 million shares selling at $50 a share would have a market cap of $1 billion.

The total market cap of S&P 500 is $21.42 trillion for March 2020. It covers roughly 80% of the available US market capitalization. This index is often used as a measure of economic strength of the US economy.

How to trade S&P 500 with FBS?

Firstly, you can trade contracts for difference (CFDs) on the S&P 500. So, CFDs copy the S&P 500 movement.

Secondly, you can use leverage or, in other words, control bigger financial positions while investing a smaller amount of money. Always remember that leverage gives you an opportunity to multiply your account, but it also increases your potential losses in case the market goes against you.

Thirdly, you can trade the market in both directions. In other words, you can gain from the price going down as well as from its increases.

Finally, the S&P often gives really clear signals for traders. We regularly post our fundamental and technical analysis to help you use these signals properly.

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2022-07-05 • Updated

Frequently asked questions

  • Can indices be traded on weekends?

    No, the markets are closed for trading on Saturday and Sunday. You can trade indices during market hours of a preferred index. Check the trading hours and plan your actions ahead.

  • What time can you trade indices?

    You can trade indices during the main market hours of a chosen index. For the US indices, trading hours start from 15:00 to 0:00 MT time. See a full list of market hours for indices trading.

  • How to start indices trading?

    The most popular way to start trading indices. Find out the best index funds to invest in. This financial instrument allows traders to profit from the difference between the opening and the closing price of an underlying asset – in this case, an index. You can trade indices in both directions, just as if you trade currency pairs. You can potentially profit from both rising and falling prices.

    For example, if you think the index will rise, open a long (buy) position. But if you think the index will fall, open a short (sell) position.

    To trade stock indices effectively, you first need to understand what their price depends on. It is generally driven by the news (e.g., earning reports), political issues, and global economic situation. It is also worth using technical analysis.

    Learn more about how to trade indices with videos from FBS market experts.

  • What is indices trading?

    Indices, or indexes, measure the price changes of a particular group of stocks over time. They allow trading the value of many companies as a single product. Stock market indices are also used to track how an industry, economy, or sector performs in general.

    Here are some of the world’s major indices:

    • Dow Jones (US30) – tracks 30 large, publicly traded US companies
    • S&P 500 (US500) – tracks 500 large-cap US companies
    • FTSE 100 (UK100) – tracks the 100 largest companies listed on the London Stock Exchange
    • Australia 200 (AU200) – tracks the 200 largest companies listed on the Australian Securities Exchange
    • Nikkei 225 (JP225) – tracks the 225 largest companies listed on the Tokyo Stock Exchange

    As the index is basically a figure that reflects the health of the market or economy, it cannot be bought or sold directly. Thus, you can trade indices via CFDs (Contracts for Difference), ETFs (Exchange-Traded Funds), index funds, index futures, or options.

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