What is S&P 500?
S&P 500 index (ticker symbol SPX or SPX), operated by S&P Dow Jones Indices, is an index which tracks the performance of 500 large-cap stocks traded on the well-known US stock exchanges such as NASDAQ and NYSE. It was launched in 1957 with a base value of 10. Because of the structure, it is commonly used as a benchmark for the performance of the overall stock market. Hence, a variety of investors measure their success against the performance of the USA 500 index and normally they are focused on outperforming it.
S&P 500 is a free-float capitalisation-weighted index with a market capitalisation estimated to be $24.4 (£19.6) trillion at the beginning of 2020. With its composition, the index reflects up to 80 per cent of the total US stock market. The constituents are selected by a committee which considers the liquidity, industry and size of each company. Microsoft Corporation, Apple Inc. and Amazon.com Inc. are among the top 10 companies included in the index based on their market cap.
S&P 500 index performance
The price chart shows that the S&P 500 had a winning streak for more than a decade. Except for certain retracements, its price had a continued upward movement until the first half of February 2020, reaching a peak at the value of approximately 3,390 points. However, the adverse events in 2020 caused a significant decrease in the value and within a month after its peak, it hit a multiyear low of around 2,200. But the value bounced back by at least 20 per cent in the next three weeks up to a value of 2800.
The index consists of 500 large-cap companies from different industries which means that factors affecting these stocks or industries can also affect the value of the USA 500 index. This would mean that you need to keep track of the factors which could have a positive impact or negative impact on the industries and stocks.
How to trade S&P 500
There are different ways with which you can make gains from movements in S&P 500 value. They differ in terms of complexity, costs, freedom to manage them personally, the ability to use cryptocurrencies, etc.
You can decide to invest in index related funds such as mutual funds, but this investment is considered to be a passive way to manage your portfolio. Hence, you may miss the chance to profit from short term S&P 500 trading opportunities. Another way to trade S&P 500 is to open positions through your bank or broker, but the monetary value of your profits is bound by the amount of capital you can invest. Also, if you have Bitcoin or Ether and you want to trade S&P 500 you have to exchange them because you can't trade directly with crypto.
Alternatively, you can decide to trade S&P 500 by trading tokenised S&P 500 index an option offered by Dzengi.com leveraged trading platform. The tokens related to the index are created using the advancements in blockchain technology. Dzengi.com applies the technology to provide tokenised assets, with them you can profit from the price movements without intermediaries.
You can actively trade tokenised USA 500 index with crypto or with fiat. You don't have to change your Bitcoin or Ether for fiat money and then deposit them on your Dzengi.com account. You can fund your account directly with crypto, which saves you both time and money.
Dzengi.com platform brings other benefits. When trading tokenised S&P 500 on Dzengi.com traders are no longer bound to open positions up to the value of their investment capital. Thanks to the leverage provided by Dzengi.com platform, you can now open much bigger trading positions, more precisely you can get a leverage of up to 1:100. Stated differently, you can execute positions with a margin of 1 per cent. For instance, opening a trading position of $25,000 (£20.085) would require you to have an available capital of $250 (£200.8). So, a 2 per cent move would mean that you will make a profit of $500 (£401.6) because you utilise the power of the margin. Otherwise, not having the leverage the same movement in value would earn you just $5 (£4).
Tokenised S&P 500 trading guide
Trading tokenised assets can be easily done via the following steps:
- Step 1: First you need to go to Dzengi trading platform and open a trading account by providing the information required with the two-factor authentication security.
- Step 2: Next, decide if you will use fiat money or you will trade directly with crypto. Remember, there is no need to convert your crypto holdings.
- Step 3: Assess the value of the position you want to open and don't forget about the 1 per cent margin offered by Dzengi.com because you will need a lower amount of your capital.
- Step 4: Traders can speculate on positive or negative movement and accordingly they could enter a long or short position with tokenised USA 500.
- Step 5: The buy and sell orders executed by traders on Dzengi.com are linked to each other after which all outstanding orders will be hedged with Capital.com, LMAX Digital or orders available on Binance, Bitstamp, Kraken, NASDAQ, NYSE and Gain Capital.
- Step 6: It is up to you to select the best time to close your positions and collect the monetary rewards.
Why trade tokenised S&P 500 index with Dzengi.com
S&P 500 index trading at Dzengi.com tokenised securities exchange has a number of advantages. Tokenised assets are underpinned by robust and immutable blockchain technology. Opening a trade will give you a token that tracks and moves according to the underlying instrument's price.
- One-stop crypto trading platform
Trade tokenised S&P 500 index with Bitcoin or Ethereum. Benefit from the commodity's price movements without turning your crypto assets into fiat.
Trade tokenised S&P 500 index with a tight market spread, benefit from maker rebates and competitive taker fees.
Experienced traders can trade the world's top markets, like the S&P 500 index, with up to 1:100 leverage.
- Effective risk management
Manage your risks and secure your profits with stop loss and take profit orders. Save your assets with negative balance protection.
We have a scalable and low latency order management system, which can execute 50 million trades per second.
Dzengi.com operates under new Belarusian regulation with best-in-class AML and KYC laws. Regulatory details and fees are upfront.