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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 Stock Index Futures Trading secret that can make you rich. Can you turn two hundred dollars into one million with penny stock investing? Well, this is exactly what one college dropout did in just 30 days when he discovered a mathematical formula that helped him turn one thousand dollars into one million in only 38 penny stock trades.

Now, stock index futures are written on the stock indexes that are composed of stocks. For example, the famous Dow Jones Industrial Average (DJIA) Stock Index is composed of 30 blue chip stocks listed on NYSE and is considered to be an important barometer of the NYSE market sentiment. Similarly, the famous S&P 500 Stock Index is based on the 500 US stocks listed on different exchanges and is published by the Standard & Poor Company. Now, when you trade these stock index futures contracts, you are betting on the direction of the whole stock market not on some individual groups of stocks. This is the best way to profit from the gyrations in the market or what you call volatility in the stock market. Stock Index Futures are used for both speculation as well as hedging.Many fund managers employ hedging strategies based on these futures contracts. The stock market crash of 1987 was the result of the hedging strategy used by the fund managers employing these stock index futures contract go terribly wrong.

The most popularly traded stock index futures contract is the S&P 500 futures. It trades on the Chicago Mercantile Exchange (CME). S&P 500 Index is made up of 400 industrial companies, 40 financial companies, 40 utilities and 20 transportation companies offering a fairly diversified view of the US economy. One tick on S&P 500 contract is worth . So there is an inbuilt element of leverage in these futures contract.

If the S&P index moves only 1 point in your favor, you make 0. These contracts get traded during the regular trading hours from 8:30 AM to 3:15 PM and after that on the GLOBEX Electronic Trading Platform during the night till 8:30 PM. Margin requirements can be variable. No uptick rule applies on futures contract, so you can go short as much as you want.

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.

Most of the day traders can easily trade the e-mini version of these contracts that get traded on GLOBEX around the clock 24 hours. These mini versions have low margin requirements that is only one fifth of the regular contracts.

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