Exactly What Is The S&P 500 Market? (Part 1 of 6)

Exactly What Is The S&P 500 Market? (Part 1 of 6)

A Brief Introduction

The Chicago Mercantile Exchange (cme) introduced the S&P 500 futures contract back in spring of 1982. The S&P 500 futures market has now become today's most actively traded equity futures contract. The S&P's futures contract represents roughly 90% of all us stock index futures trading. The S&P 500 is comprised of the largest 500 listed stocks, therefore allowing you to easily and effectively buy or sell an extremely well diversified portfolio of stocks in one stock index futures contract. This allows you to make trading/investing decisions based on your overall outlook of the stock market. Let me quickly give you a couple advantages of trading the S&P 500 stock index futures contract:

You can easily participate in broad market moves, with one trading decision (one chart) - instead of having to choose individual stocks (looking at many charts). Why bother looking at various stocks when you can trade the S&P 500 - one chart - one market.
You can easily protect the value of a portfolio during adverse markets without incurring high transaction fees.
And in October 1997 the Mini S&P 500 (symbol = es) was introduced - which is the same as the S&P 500 (symbol = sp), except it is one fifth the size in terms of point and tick size, discussed shortly.