December 1, 2022 10 min to read

How is the trading S&P500 with XM.

The S&P500 is one of the representative stock indices in the United States, along with the Dow Jones Industrial Average (US30) and Nasdaq (US100).

S&P500 TRADE (US500)

INVESTMENT OF BEST COMPANIES IN THE U.S. WITH XM, YOU CAN TRADE FROM A SMALL AMOUNT. MOREOVER, IT CAN BE TRADED LIKE FOREX.

What is S&P 500 (US500)

The S&P 500, also known as the Standard & Poor’s 500 Index, is a stock market index that tracks the performance of 500 large publicly traded companies listed on the stock exchanges in the United States. The index is widely considered to be a barometer of the overall health of the US stock market and is often used as a benchmark for the performance of mutual funds and other investment vehicles.

The S&P 500 is a capitalization-weighted index, which means that the weight of each company in the index is proportional to its market capitalization, or the total value of its outstanding shares of stock. The index is calculated by dividing the total market value of the 500 companies by a divisor, which is adjusted to account for corporate actions such as stock splits and dividends.

The S&P 500 is a popular choice for investors looking to gain exposure to a broad range of large, well-established companies in the US stock market. The index is highly diversified, covering a range of sectors including healthcare, technology, consumer goods, and financial services.

S&P500 (US500) with XM

The S&P500 is one of the representative stock indices in the United States, along with the Dow Jones Industrial Average (US30) and Nasdaq (US100).

Unlike other overseas Forex, XM has spot and futures even with the same S&P500, each with advantages and disadvantages.

The stock index of 30 representative US companies is the Dow Jones Industrial Average, and the S&P500 is a stock index of 500 companies.

Since many companies are covered, it can be said that it is a stock index that reflects the US economy more strongly.

And even in the present of the corona wreck, we are updating the highest price every day.

It is very popular as an investment target for many investors, and many investors are actually accumulating profits, and it is said that the S&P 500 will continue to rise as long as the US economy is doing well.

Even those who have never touched on stock prices can trade XM like an FX currency pair, but let’s take a closer look at the “S&P500”.

Why Trade S&P 500 (US500) with XM?

At XM we offer S&P 500 (US500) as cash and futures CFDs. Our cash index CFDs are undated transactions that aim to replicate the cash price of the underlying index, and so they are adjusted for interest and dividends. Index futures CFDs expire on specific future dates and are cash-settled on the expiry date.

Benefits of trading S&P 500 (US500) with XM:

• Zero Commissions

• Zero Fees

• Low Margin Requirements

Trading Conditions

US500 CASH

US500 FUTURE

S&P500 FOR RISK DIVERSIFICATION INVESTMENT

The constituent stocks are very well-balanced, which is one of the reasons for its popularity.

Constituents of the S&P500 (partial excerpt)

Many other companies are included in the S&P 500.

The S&P 500 has a wide variety of industries and a good balance, so it has the advantage of diversifying risk compared to individual stock investment .

There is an image that many assets are required to handle stocks in stocks.

However, XM’s S&P500 (US500) is recommended because you can start trading even with a small amount.

Next, let’s see if it is possible to trade the “S&P500” with XM even with a small amount.

SMALL INVESTMENT WITH XM POSSIBLE

The leverage when trading S&P500 (US500) at XM is different from FX’s “1000 times”,Hundredfold” applies.

However, since the target of investment is a major American company, it is possible to aim for a large profit with a small fluctuation even in a short-term trade.

Now let’s take a step-by-step look at how to trade the S&P500.

S&P500 (US500)TRADING PROCEDURE

Start MT4 → XM’s currency pair list “CFD Cash > US500-Cash” “CFD Futures > US500-SEP21”

” after US500SEPs” is the English acronym that indicates the contract month. (September)

The last “21” indicates the last two digits of the year. (2021)

Please note that it is not a date.

POINT

FX currency pairs and lot numbers are different. For FX trading, 1.0 lot is 100,000 currency, but for US500, the minimum trading volume is 1.0 lot, and the profit and loss calculation method is different.

I think you’ll understand when you check the procedure, but isn’t it easier than you thought?

Next, let’s check the trading hours of the S&P500 (US500).

TRADING HOURS

S&P500 trading hours image

The trading hours for the S&P 500 on XM are as follows:

There is also maintenance time, so please check the details from the link below.

Now, let’s take a look at the formula for calculating the amount of margin actually required.

We recommend that you check how much assets you need before trading as a guide.

The formula for calculating the required margin is as follows.

• S&P500 entry price x number of lots x 1%
• S&P500 margin requirement = 1%

Next, let’s look at the difference between “actual” and “future”.

DIFFERENCE BETWEEN CASH AND FUTURES

There are two types of CFDs on XM: spot and futures.

Possibility of long-term holding No deadline futures

Contract month: position is liquidated when it expires There is no expiration date for the actual product and it can be held for a long period of time, so it can be said that the trading sense is similar to Forex.

On the other hand, since futures are contract months, it is necessary to be careful as the position will be forced to close on the expiration date.

Below is a comparison table for easy understanding.

THE ACTUAL THING FUTURES

Spread narrow About twice as much as the actual product dividend adjustment can be none swap point can be none Settlement deadline (contract month) none can be

POINT

After the due date, the trading chart itself cannot be displayed on MT4/5.

Next, let’s take a closer look at the “Spot” and “Futures” of the S&P500 (US500) based on the above comparison table.

THE REAL THINGNARROW SPREADS Image that the spread is narrower for the actual product

Spots have tighter spreads than futures.

In the case of US500, swap points and dividend adjustments are granted and collected for the spot, but the spread is narrow.

POINT

When trading across dates, futures are overwhelmingly more profitable in terms of transaction costs.

Next, let’s look at dividend adjustments and swap points.

CASH ONLY SWAP POINT& DIVIDEND ADJUSTMENT

dividend adjustment

In CFD trading, you can receive dividend adjustment money in the same way as dividends obtained in actual stock trading.

“Buying” the spot → Granting of dividend adjustment money “Selling” the actual item → Collecting the dividend adjustment money

POINT

In XM, both “buy” and “sell” are negative swaps in the case of the spot of S&P500 (US500).

Now, let’s see which is better, “Spot” or “Futures”, depending on your trading style (day trading/swing trading).

BY TRADING STYLE RECOMMENDED BRANDS

• spot → day trade
• Futures → Swing trade

Futures are recommended for cross-date swing trading.

Just be careful to trade without forgetting the deadline.

Finally, let’s take a closer look at the benefits of trading the S&P500.

TRADE ON THE S&P500BENEFITS

I will explain the benefits of trading the S&P500 with XM.

The advantages of trading the S&P 500 are:

• Good compatibility with high leverage
• Peace of mind with the zero cut system
• No need to separate trading accounts

Merit 1

Good compatibility with high leverage

The S&P500 is compatible with high leverage, and the required margin rate of XM’s S&P500 (US500) is “1%”, the maximum leverage is 500 times.

From November 2022, it was raised from the previous maximum of 100 times to 500 times with Nikkei 225 (jp225).

It is a target for traders who want to accumulate profits in a short period of time.

POINT

Many of the domestic FX S&P500 have a maximum leverage of only 10x.

Merit 2

Zero cut systemfeel safe in

Safe image with zero cut system

At XM, the zero cut system is applied to CFD trading as well as FX trading.

In CFD trading, as in FX trading, the window may open wide at the beginning of the week, so even if you focus on scalping, if you do not have a zero cut system for trades that span the week,MarginIt is not safe because there will be a payment obligation due to “.

Merit 3

separate trading accountsno need

Domestic Forex companies and many securities companies also offer Forex and CFD trading, but each account is separate.

Even if you have opened an account for stocks, gold or silver, you need to apply for another account again to start FX trading or CFD trading.

Moreover, since it is operated for each account, the margin cannot be shared, which is inconvenient and costly.

With XM, you can of course share the margin with the same account, and there is no need to apply for creating a new account.

So far, we have taken a closer look at “S&P500 (US500)”, which can be handled like FX trading with XM.

Finally, let’s check the “summary” about the S&P500 (US500).

SUMMARY:S&P500

The S&P500, which is an American stock index, tends to be easier to read than other CFD stocks and easy to trade as if you were dealing with FX currency pairs.

As long as the US economy continues to perform well, we can expect it to continue to rise in the long run.

The S&P 500 is also attracting attention from small investors and is popular as an asset management destination.

Also, some people manage the S&P500 for retirement funds.

By using XM’s unique high-leverage zero-cut system, it is possible to invest and manage assets in 500 leading American companies with a small investment amount .

If you haven’t opened an account yet, please do so by clicking the link below.

How to Start Trading S&P 500 (US500)?

Step 1

Open an XM Real Account

Step 2

Download and log in to either the MT4 or MT5 platform

Step 3

Double-click on S&P 500 (US500) from the “Market Watch” to open an order for this instrument.

Visit XM Official Website.