Guide To U.S. Index Trading

Guide To U.S. Index Trading

Indices are one of four asset classes to choose from when trading within the Digital Options Broker platform. The value of each index is derived from the prices of the assets within the index. Several key indices are located within the United States, each of which performs in its own distinct manner, and each of which offers profit opportunities to digital options traders.

Of the key U.S. indices, the Dow Jones is credited as most accurately showcasing overall economic conditions within the country. Next would be the S&P 500, which represents a massive 500 different stocks. The offering included within the S&P are trade publicly via either the NASDAQ or NYSE.

S&P 500 Trading

When you trade the S&P 500, you are essentially trading with hundreds of stocks which represent a wide variety of market sectors. As such, this is an extremely popular index for trading and there is no shortage of S&P 500 news online. You’ll often see this index discussed in the daily several Brokers market analysis, but can also access market information elsewhere online.

Dow Jones Trading

Each index is only available for trading during certain hours. The Dow Jones is open during the Mon-Fri business week, for a total of seven hours on each of these days. The overall value of this index will be connected to reports such as manufacturing, unemployment, GDP, consumer sentiment, housing, earnings, credit, and more. Each of these reports is likely to impact the value of the Dow Jones.

Strategy For U.S. Indices

The most basic strategy will be to focus intently on fundamental analysis. The numbers associated with the above mentioned reports are going to be published, after which you will know whether or not they met the expectation of market analysis. Better than expected reports typically lead to bullish conditions, while worse than expected report usually lead to bearish conditions.

This is just one of many digital options strategies that are linked to the United States indices. Technical analysis will be necessary, but each index value is greatly impacted by investor sentiment. The best tool for use when trading any index is an economic calendar. Once you’ve linked specific reports to specific indices, you’ll know just where to look for daily trade opportunities.

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