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.
2020-05-20 • Updated