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S&P 500

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Jemma Grist

Written By

Jemma Grist

Jemma is a writer, editor and fact-checker focused on retail trading and investing. Jemma brings a unique perspective to the forex, stock, and cryptocurrency markets and works across several investment websites as a researcher and broker analyst.

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Edited By

James Barra

Edited By

James Barra

James is an investment writer with a background in financial services. As a former management consultant, he has worked on major operational transformation programmes at prominent European banks. James authors, edits and fact-checks content for a series of investing websites.

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Fact Checked By

William Berg

Fact Checked By

William Berg

William contributes to several investment websites, leveraging his experience as a consultant for IPOs in the Nordic market and background providing localization for forex trading software. William has worked as a writer and fact-checker for a long row of financial publications.

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Updated

Oct 2, 2024

S&P 500 brokers provide access to the most popular stock index in the United States, followed closely by the Nasdaq. This guide includes a comprehensive breakdown of the criteria required for US stocks to be listed in the S&P 500, as well as an analysis of the top performing companies in the index. We also explain how to get started with S&P 500 brokers and list the top supporting platforms, tools and investing apps. Find out how to compare online brokers with access to the S&P 500 in 2024.

Comparing S&P 500 Brokers

An online broker is an investor’s gateway to the market. Therefore, it is important that you choose S&P 500 brokers that suits your financial goals, risk appetite and investment style. The key factors to consider when comparing S&P 500 brokers include:

Platform

The best platform offered by S&P brokers is a matter of personal preference. But key elements to look for when investing in the S&P 500 are straightforward volume charts, market indicators (such as 50, 60 or 90-day moving average tickers), plus other technical analysis tools. Additionally, it is worth making sure you can access strong trend tracking and comprehensive price history, plus information on company economics.

Some S&P 500 brokers will facilitate trading on industry-established platforms such as MetaTrader 4 (MT4) or MetaTrader 5 (MT5). Alternatively, investors may wish to use a platform that is independent of their brokerage when speculating on the S&P 500. Traders may prefer to use charts that they are already familiar with from TradingView, for example.

Fees

Retail investing can incur high fees, including commissions, deposit and withdrawal charges, plus transaction costs. If you’re trading in high volumes, these fees can reduce your overall yield, erode profits and impact your S&P margin. Some S&P 500 brokers will advertise a $0 fee package when trading the index, but bear in mind that there may be hidden charges that are applied later. For example, IG offers commission-free direct investing on the S&P 500, though overnight swap charges apply.

The best brokers that support S&P 500 trading provide a transparent fee structure and a published pricing schedule available on their website. Prospective investors should be able to research how much it will cost to trade the S&P 500 without needing to create an account with a given provider.

Customer Support

Investing in any asset class can be confusing, so you may rely on the support services of S&P 500 brokers. Reliable and responsive customer service is important here.

During market operating hours, most brokerages will offer comprehensive support, with the best brokers that offer S&P 500 trading providing 24/7 customer service via live chat, telephone, email and social media.

Some of the best S&P 500 brokers with 24 hour customer support include XTB (24/5) and CMC Markets (24/5).

Additional Features

Leading S&P 500 brokers will offer additional features to enhance the user experience. When trading the S&P 500, using a historical data sheet can provide insights into past trends, prices, p/e ratio and dividend history. This data can typically be split out by year or by sector if traders want to research specific stocks rather than the entire S&P 500 index.

Some S&P 500 brokers may also offer trading calculators that can be used before entering a position, or when devising a new investment strategy. These include return or compound interest calculators which allow you to adjust variables, for example, based on whether you’re investing from the UK or not.

Other useful additional features include an economic calendar to keep track of important dates, historical and live price charts, an S&P bot to automate positions, or educational videos which investors can watch on the broker’s website. Live streams with the latest US corporation news can also provide valuable insights to support investment decisions.

Security

When you’re risking your own capital, your funds need to be secure. Most reputable S&P 500 brokers will be regulated by leading financial bodies such as the Securities & Exchange Commission (SEC) in the US or the Financial Conduct Authority (FCA) in the UK. You should always research whether your chosen brokerage is licensed to operate in your jurisdiction, and you can verify this by visiting the website of the financial watchdog.

The level of security offered by the brokers that support S&P 500 trading is also important. Standard security procedures include a safe key code, encrypted data processing and multiple authentication factors. Some S&P 500 brokers may require non-US residents to provide additional identification documents when trading the index to comply with legislation policies following the Patriot Act, 2001.

What Is The S&P 500?

The Standard and Poor’s 500, commonly known as the “S&P 500”, is the most traded stock market index in the United States. The S&P 500 tracks the performance of the 500 largest US companies which meet the S&P criteria for selection. Because the S&P 500 represents most of the largest businesses in the US, many traders use the index to speculate on the health of the US economy in general. The index is even seen as a definition of the overall global economy. As a result, there is ample choice of S&P 500 brokers to choose between.

The S&P 500 was initially introduced in 1957 to make it easier for investors to track the value of major companies trading on both the New York Stock Exchange (NYSE) and the NASDAQ Composite. It was founded by Henry Poor and the Standard Statistics Company in 1941. Since its development, US companies included on the S&P stock list have changed dramatically as firms have risen and fallen.

Note, when day trading with S&P 500 brokers, share prices and are typically denominated in USD.

S&P 500 Criteria Explained

The list of companies included in the S&P 500 is measured by the weightings of market cap and free float. For companies to be eligible for inclusion in the index, they must meet the following criteria:

• Trading on the NYSE for longer than one year
• Market cap of at least $14.6 billion (in 2022)
• Majority of company shares are available in the public domain
• A minimum of 250,000 company shares have been traded in the last six months
• Have positive earnings reports for the most recent year, including the publication of any S&P 500 eligible fourth quarter performance

Note that not every large company in the US is necessarily included in the S&P as they may not satisfy the inclusion criteria above. This includes companies such as Berkshire Hathaway, Uber and Dell. Fortunately, the best S&P 500 brokers also offer investment opportunities on a range of equities not included on the index.

Trading Hours

The S&P 500 opening hours are aligned to the hours of the New York Stock Exchange and the Nasdaq stock market. The opening hours are typically 9:30 AM to 4:00 PM EST (1:30 PM to 8:00 PM GMT), excluding market holidays.

Additionally, it is possible to engage in premarket trading and after-hours investing, depending on whether your chosen S&P 500 brokers offer it. Though, there is no overnight trading or weekend speculation on the S&P 500.

E-Mini S&P 500

To increase accessibility across the S&P 500, in 1997 the Chicago Mercantile Exchange (CME) began offering the E-mini S&P 500. This index offers futures and options contracts on the S&P 500 index.

An E-mini S&P 500 futures contract essentially states that if a trader buys a contract today, they are obligated to either buy or sell the asset at a pre-agreed share price on a set date in the future. Day trading E-mini S&P 500 futures is less popular because E-mini futures are more stable and less volatile. For traders investing on a longer timeframe, price stability might attract them to the E-mini.

Traders of the S&P index may also deploy a hedging strategy with the E-mini S&P 500 to hedge against any unexpected price predictions that might impact their current trades. Investors can also set signals for any key stock price movements to alert themselves to swings that may compromise their positions.

Note, that both the e-mini futures index and the traditional index opening hours are in line with the CME and the NYSE.

Getting Started

Regardless of whether you’re targeting annual, quarterly, monthly, weekly or daily total returns, following a step-by-step approach will give you a good fundamental basis to start investing in the S&P 500. To get started:

Fund Your Account

Once you have selected your broker, you need to deposit funds into your account before you can begin to trade. S&P 500 brokers will offer different payment options. Instant processing and flexible limits should be top of your list. A low minimum deposit requirement should also be a key point to look out for, particularly if you are new to the index.

Recognized methods include VISA & Mastercard debit/credit cards, PayPal, and Skrill. Even cryptocurrency is being accepted as tender.

Do Your Research

Before you enter the market, it’s good practice to carry out in-depth analysis and market research on the S&P 500 and the stocks in question. Because it’s the most widely traded index in the US market, there is a significant amount of information available online. The best S&P 500 brokers will provide useful articles about the index on their websites, however third-party platforms can often provide better independent insights.

This is particularly true with the S&P 500 Futures Live Trading Group. This is a community of traders who train other investors and review S&P 500 ideas and strategies that have been shared by other members. Although new traders can join for free initially, it does cost to join and some of the reviews are mixed.

Investors looking for S&P 500 trading tips that are free of charge can use discussion forums such as Reddit or consult online articles and videos. Other popular sources include Bloomberg and Morningstar.

Choose Your Asset

Many traders may intend to trade the S&P 500 or the E-mini S&P 500, however there is also the option to trade some of the individual stocks included in the 500-strong list. It’s difficult to have a good understanding of all 500 stocks, as each will have its own market price driven by unique factors and fundamentals.

Despite this, all S&P stocks on the index share two common qualities: volume and volatility:

Volume

The meaning of volume is the number of shares being traded at a specific time. The S&P 500 trading volume is based on all of the shares of the stocks listed under the index. If the chart history of the S&P showed that the index had increased by a daily trade volume of 1,000 transactions since yesterday and decreased by 500 today, then the total volume over the two days would be 500. In this example, the average daily trading volume of the S&P 500 would be 250 (500/2 days).

Investors can use trading volumes to gauge whether other market participants’ interest is increasing or decreasing in the index, which could prompt a move from the trader. This volume trading logic applies to both the entire S&P index as well as individual stocks within the S&P.

Volatility

Volatility is the risk that an asset’s share price can change unpredictably at any given time. The size of any given price movement is relatively unknown, which therefore increases the risk.

Large swings are considered to be highly volatile, whereas smaller swings in an asset’s price are considered to be of low volatility or stable. Typically, day traders thrive when a stock’s  price experiences large swings because it means that they can capitalize on volatile price movements.

Choose Your Strategy

Once you have chosen between brokers that support trading on the S&P 500, and the asset you wish you trade, you need to implement a strategy.

There is a range of strategies available depending on your risk tolerance or how active you will be in the market. In all scenarios, being aware of the S&P pre-market price will give traders an insight into the opening value of the asset, which helps with the development of a day trading strategy.

For example, an unusually high close/pre-opening market price might prompt a trader to sell or short the index in anticipation of the price falling when the market opens. This strategy is an example of intraday trading on the S&P 500.

Other traders may analyze the index’s performance over a longer time, which would typically lend itself to a swing investing strategy.

Some market participants trade the S&P 500 and other assets as their full-time jobs, and will often share free advice online on developing a solid strategy. When you are seeking tips online, however, be wary of any paid groups or courses as these are usually “too good to be true” and can sometimes be scams designed to target rookie investors.

It is also worth checking whether S&P 500 brokers permit certain strategies and investing systems before you sign up. Some S&P 500 brokerages and platforms prohibit scalping, for example.

Final Word On S&P 500 Brokers

The S&P 500 has been traded for over 60 years and remains the leading index in the USA. It is popular with day traders because it gives a good indication as to how the US market is currently performing, which can provide insights into other asset classes.

It is worth noting that the S&P can be heavily influenced by how individual companies with large weighting are performing. For example, if Tesla’s share price falls due to an Elon Musk tweet, then the index might also be slightly affected by this as the market reacts.

Overall, the S&P 500 is a solid asset to have in your portfolio, and due to its popularity, there is a wide range of helpful resources available online. Use our list of the best brokers with access to the S&P 500 to get started today.

FAQs

Do S&P 500 Brokers Offer Trading On The Index Via MetaTrader 4?

Yes, trading the S&P 500 is available on MT4 through supporting brokers. Some brokers that support trading on the S&P 500 also provide premarket/early investing and charts and tools to help identify key support levels today or over the last 10 years. Quarterly returns and historical data on dividend yields are also available at the top S&P 500 brokerages. See our list of the best brokers and trading apps for buying S&P 500 stocks.

What Is The Symbol For The S&P 500 At Online Brokers?

When trading the S&P 500 with brokers that offer the index, look out for the market ticker symbol INX.

When Do S&P 500 Brokers Start Futures Trading?

The Chicago Mercantile Exchange (CME) first introduced S&P 500 futures contracts in 1982, and subsequently released the S&P 500 E-mini option in 1997. Now, several top S&P 500 brokers offer futures products.

Can You Invest In S&P 500 With Most Leading Brokers?

Yes, most top-rated brokers will allow you to trade the S&P 500. You can find the index on eToro and Webull, among many others.

Is The Nasdaq Or S&P 500 Better?

The S&P is a much broader representation of the US market as it includes stocks that are listed across different markets and sectors, whereas the Nasdaq is exclusively made up of Nasdaq-listed stocks, over 50% of which are technology focused. When choosing between trading S&P 500 and Nasdaq, the choice should be made based on the trader’s market knowledge and risk tolerance while taking into account the difference between the underlying structures. Importantly, most S&P 50o brokers also support online trading on the Nasdaq.

What Time Does The S&P 500 Stock Index Start Trading On Brokers’ Platforms?

The NYSE and the Nasdaq both open at 9:30 AM and close at 4:00 PM EST. The S&P and all of the stocks included in the index are also bound by these timings so this will reflect on your broker’s platform interface.