How To Invest In The S&P 500 With Low Collateral
- The CME E-mini S&P 500 Index Futures tracks 500 large-cap common stocks on the NYSE and Nasdaq exchanges. Traded on the Chicago Mercantile Exchange (CME), it moves with the S&P 500 index; each point move in the index is worth $50 per E-mini contract.
- The index rose 0.28 percent on Tuesday trading, to 1,877.25 points.
- Among the stocks comprising the S&P 500, the largest movers on Tuesday were: ENSCO PLC (NYSE: ESV), up 5 percent; Delphi Automotive PLC (NYSE: DLPH), up 3.65 percent; Teradata Corporation (NYSE: TDC), up 3.55 percent; Under Armour Inc (NYSE: UA), down 6.78 percent; and ONEOK, Inc. (NYSE: OKE), down 6.48 percent.
After five consecutive days tumbling, the S&P 500 index finally managed to close up on Tuesday, although individual stocks closed quite mixed. Also recuperating on Tuesday were healthcare and oil stocks.
The question now is, where will the index go? Will it continue to surge? Or will it fall once again? And, is there a way to bet on its performance over the short term without being exposed to high risks and collateral?
What Are Binary Options?
Investing via binary options is just that: Playing a binary event. “Binary options are limited risk contracts based on a simple yes/no market proposition like will the markets go up by the end of the trading week,” binary options trading site Nadex explained.
Trading The S&P 500
There is a way to capitalize from the moves of the S&P 500 Index (or its futures) without actually investing in the index itself. By purchasing binary options, investors can bet on something as simple as: “Will the index trade above 1890 points this week?”
To know which stocks you are actually playing, check out a full list of the S&P 500’s components here.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.
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