in this video we're gonna find out why
the S&P 500 index has been such a
popular market with traders around the
world for many decades hello I'm David
Jones from capital command this is the
latest in our series where we look at
really popular markets when it comes to
stock market indices and probably one of
the heaviest traded around the world is
the u.s. is S&P 500 so what we're gonna
do we're going to take a look at some of
the facts behind the SNP find out why
it's so popular with traders and it has
been for many decades and how you can
trade it with capital comm so let's get
started so let's take a look at some of
the stats what is the S&P 500 index and
why is it so popular the S&P 500 is
based on amongst other factors the
market capitalization of the 500 largest
companies traded on the US market
so the S&P is considered to be a truer
reflection of the broader US stock
market when you compare it to something
like the Dow Jones which maybe more
people have heard of but the Dow Jones
is only 30 stocks the S&P of course by
its name it's made up of 500 companies
it's traditionally a way of gaining
broad exposure to large US listed shares
so maybe rather than investing in one
share buying or selling the S&P gives
you exposure to a whole cross-section of
the US market it's been a really popular
market with traders for decades and it's
really that that daily volatility that
appeals to traders they seldom a dull
moment when it comes to these major
global stock market indices and the S&P
is no exception so how can you trade the
S&P with capital calm you trade
contracts for difference CFDs which is a
phrase you may be familiar with
so CFDs mimic the movement of the
underlying market if the markets going
up the CFD will rise and vice versa
using CFDs you trade using leverage what
this means in a nutshell a small amount
of money can control a much bigger
financial position which of course is
something that traders use to try and
magnify the
profits but it's very important to
understand if you're taking on leverage
and magnifying your profits then of
course you're increasing the amount you
lose if you're wrong so it's very
important to use risk management
controls such as stop losses you can
trade markets in both directions when
trading using CFDs clearly markets don't
go up all the time there can be short or
maybe more prolonged periods when
markets fall but when you're using CFDs
you can trade both long and short so you
can try and profit whether your view on
a market is that it's gonna go up or
it's gonna start falling let's take a
look at this market to get a feel for
how it trades so here's the big-picture
view you can see the S&P pushed up to
above 2900 in September 2018 then we saw
this there's massive plunge dropping
about 20% down into December and then
for 2019 so far we have seen the market
make a bit of a comeback but traders
tend to have more short term time
horizon so here's the last couple of
days for the S&P and you can see plenty
of volatility throughout the trading day
it's a 24 hour market like many of these
markets but pushed as high as 28 85 and
slid back about 50 points down to the
low 28 30s before bouncing back once
more and it's this sort of volatility
that makes the S&P 500 such a popular
market with traders for many decades so
I think it's fair to say it is a a
broader based index than the Dow Jones
which is only 30 shares we saw the
volatility both over the medium to long
term plus short-term day to day and that
is really what traders are looking for
you can trade it with capital calm using
CFDs there's more on CFDs on our site
but again you're using leverage so it's
very important that you put sensible
risk management in place just to cap
those losses should the market go
against you we'll wrap things up there
but from me David Jones and capital com
good luck with your trading
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