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Stock Indexes are used as a barometer of a stock market. If the stock index goes up, the stock market is considered to be in a bullish mood and if it goes down, the stock market is considered to have turned bearish. Many investors and traders invest in individual stocks doing a lot of research to find them. A much better way is to trade the whole stock market. How can you do that? You can do that by trading stock index futures contracts. There are now more than 70 stock index futures contracts that are being trading in around 20 exchanges around the world. You don’t need to trade all of them. The most popular are the S&P 500, NASDAQ, Dow and DAX futures contracts. What you can do is just master one or two out of these contracts and become an expert on them. Trade S&P Futures. Know this shocking Dow Futures secret that can make you rich. Discover a forex robot that made 2,270.30% in 2009 averaging about 101% every month.

So stock index futures are contracts based on indexes that are composed of stocks. For example, S&P 500 futures are based on the famous S&P 500 Stock Index; a group of 500 commonly traded US stocks. When you are trading stock index futures, you are betting on the general direction of the market not on some individual stocks. This way you are blocking out a good deal of noise that is associated with the daily gyrations in the stock prices. Stock index futures are used for both hedging as well as speculation. Stock index futures are used by hedge fund managers in hedging their stock portfolios.

Now, let’s discuss a few of these contracts. The most popular among the day traders is the S&P 500 Futures. This contract is traded on CME (Chicago Mercantile Exchange) and is based on the famous S&P 500 Index comprising 400 industrial companies, 40 financial companies, 40 utilities and 20 transportation companies. So you can see this gives a broad and diversified view of the US economy. Now, one tick on this contract is worth .

If the S&P 500 Stock Index moves one point, you either make 0 or lose 0 depending on which side of the market you were. These contracts also get traded on the GLOBEX Electronic Platform after the regular trading hours. Margin requirements can vary. If the S&P 500 Index is at 1000 points, the contract is worth 0*1000=0,000. A huge amount for most of the day traders.

The second most popular futures contract is the NASDAQ-100 Futures Index. This index is composed of 100 largest stocks listed on NASDAQ including large technology and biotech stocks. For many day traders, the margin requirements to trade these regular contracts maybe too high. Keeping in view these facts, mini versions of these contracts are also available.

E-mini S&P 500 (ES) and e-mini NASDAQ 100 (NQ) are among the most popular stock index futures contracts as they enable you to trade the market trend with only one fifth of the margin requirement.