Big Review of the 3 Major US Stock Indices! How to trade the top three US index futures?

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What is the US Stock Index?

The U.S. stock index is a comprehensive concept that refers to an index that tracks and reflects the overall movement of the U.S. stock market. Specifically, U.S. stock indices are classified into different categories based on the different characteristics of the industries, market capitalizations, and exchanges that are tracked.

Meanwhile,Dow Jones Industrial Average(Abbreviation: Tend/DJIA),S&P 500 IndexundNasdaq IndicesMost commonly known are the three major U.S. stock indexes, while the Dow Jones Industrial Index (Dow) and S&P 500 are often used to reflect market movements.

Live quotes from three major US stock indices

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The top three U.S. stock indexes

1. Dow Jones Industrial Average Index

$Dow Jones Industrial Average(.DJI.US)$(DJIA), which tracks the 30 most scalable and influential U.S. corporate stocks, reflects about a quarter of the value of U.S. stocks. It is one of the oldest and most well-known stock indices in the world.

Dow Jones Industrial Averages is calculated as a share price weighting (adding up each share price and then dividing by the total number), which can only reflect the investor's earnings on a given enterprise when capital reductions occur and increase in capacity affect the share price. Changing risk attitudes reveal the market sentiment at the edge of the iceberg, but do not reflect market sentiment as a whole.

  • Dow Jones Industrial Average Index constituent companies include (in order of rank):

道瓊斯工業平均指數成分股企業
Dow Jones Industrial Average Index Composite Companies

To learn more about the Dow Jones Industrial Average, read:What is Dow Jones Industrial Index?


2. Nasdaq Composite Index NASDAQ Composite Index

$Nasdaq Composite Index(.IXIC.US)$(also referred to as), which is primarily used to track the overall price movements of a basket of stocks listed on the Nasdaq exchange, including more than 3000 constituent stocks. The constituent entities cover all sectors, of which approximately 6% come from the technology sector, and the remaining 4% come from healthcare, communications, core consumer, industrial manufacturing and non-core consumption. Since the Nasdaq Composite Index's constituents are mostly from the technology sector, it is also considered a stock index of technology stocks, as an indicator of the overall performance of the technology industry.

IN ADDITION, THE NASDAQ COMPOSITE INDEX (INDEX) IS CALCULATED DIFFERENTLY FROM INDICES IN THAT IT TAKES A MARKET CAPITALIZATION WEIGHTED APPROACH (COMPANY STOCK PRICE X TOTAL COMPANY SHARES = COMPANY MARKET CAPITALIZATION, THEN ADDING UP THE MARKET CAPITALIZATION OF ALL COMPANIES AND SUBTRACTING THE NUMBER OF TOTAL COMPANIES) TO MORE ACCURATELY REFLECT THE OVERALL CHANGES IN THE MARKET.

  • TOP 10 CONSTITUENT STOCKS WITH THE HIGHEST RATIO OF NASDAQ COMPOSITE INDEX (* DATA AS OF MAY 1, 2023):

納斯達克綜合指數成分比例最高的前10隻成分股
The top 10 constituent stocks with the highest proportion of Nasdaq Composite Index components

For a more detailed understanding of the Nasdaq Index, please readWhat is the Nasdaq Composite Index?

3. S&P 500 S&P 500 Index

$S&P 500 Index(.SPX.US)$(English: S&P 500 Index) is widely considered to be the only indicator that measures the performance of the U.S. blue chip stock market. It includes the top 500 listed companies in the United States, accounting for approximately 80% of the total market capitalization of the U.S. stock market, and a reference value that reflects the overall health of the U.S. stock market and economic strength.

In general, a sharp rise in the S&P 500 is often interpreted as a good signal for the economy, and falls can be seen as a signal of potential risk, and are highly regarded by analysts and policy-makers alike.

All constituent stocks that are recognized and included in the S&P 500 Index must fully meet the following conditions:

  1. As an American company

  2. Market capitalization of $146 billion

  3. High liquidity

  4. The number of investment shares owned by a large proportion of the population

  5. Net Profit for 4 Consecutive Quarters

  • S&P 500 Index Indices Constituents

    Technology, healthcare, energy and finance included the highest proportion of IT industries, at close to 30%. The top 10 ingredients with the highest ingredient ratios are as follows:$Apple(AAPL.US)$,$Microsoft(MSFT.US)$

    (* Data as of 29 December 2023):

標普500指數指數前10隻成分股
Top 10 constituent stocks of S&P 500 Index
To learn more about Dow Jones Industrial Index, please readWhat is the S&P 500 Index?

What are US Stock Futures?

US Stock FuturesUS Stock Index Futures, also known as US equity indices, US indices and US indices. The U.S. stock index itself is simply a reflection of the stock market's movements and cannot be traded directly. If investors want to invest in US equity indices, they need to trade derivatives such as US stock index futures. Below is an overview of the three major U.S. equity futures contracts:

1. Dow Jones Industrial Index Futures

Dow Jones futures are derivative financial products offered by the Chicago Mercantile Exchange (CME) and are also derived from Mini Dow Jones Index Futures (also known as Minor Dow Jones or YM) and Micro Dow Jones Index Futures. Investors can invest using the margin system, leverage leverage to increase funds, and perform hedging operations. A number of channels indicate that futures are one of the most traded and popular index futures commodities for efficient and more freedom.

道瓊斯工業指數期貨对比
Dow Jones Industrial Index Futures Comparison

2. NASDAQ INDEX FUTURES (KOONA INDEX)

NASDAQ INDEX FUTURES ARE CURRENTLY ONE OF THE MOST LIQUID AND ACTIVE INVESTMENT PRODUCTS ON THE CHICAGO MERCANTILE EXCHANGE (CME).

NASDAQ INDEX FUTURES CONTRACTS CAN BE DIVIDED INTO NASDAQ 100 FUTURES AND MICRO INDEX 100 FUTURES. THE FOLLOWING IS A SUMMARY OF THE CONTRACT SPECIFICATIONS FOR NASDAQ INDEX FUTURES:

3. S&P 500 Index Futures

S&P 500 Index futures are futures contracts derived from the S&P 500 Index and can be divided into three main futures contracts: Mini S&P 500 Futures, Micro S&P 500 Index Futures and S&P Mid-Market 400 Index Futures. They are suitable for a highly liquid portfolio of investment products. Speculation and hedging. And they are based on the size of the contract value.

How to Invest in US Stock Indices?

The U.S. stock index itself is simply a reflection of the stock market's movements and cannot be traded directly. If you want to invest in US equity indices you can choose to invest in US equity index futures or you can choose to investUS Stock Indices ETFand US stock index CFDs, etc.

Futui's offering of four major exchanges (Chicago Stock Exchange, Hong Kong Stock Exchange, Singapore Exchange, Osaka Exchange) are now online, including A50, HSBC, Nasdaq, Micron, and many other key assets that will not be supported FUTURES MARKETS IN MANY REGIONS AND COUNTRIES SUCH AS EUROPE AND MALAYSIA, LET'S SAY YOU HAVE ONE ACCOUNT, INVESTING IN FUTURES GLOBALLY. Futu investors can enjoy the following futures trading advantages:

  • Wide range of categories: Indices, Exchange Rates, Metals, Energy, etc

  • Low transaction fees: Hong Kong commission fee as low as HKD 2

  • Instant allocation of funds: Transfer money to a futures account, 7x24 anytime

  • Seamless trading without delay: Self-developed system, millisecond real-time futures trading

How to open and buy Hong Kong stocks in Futu?

In Futu, there are three steps to trade futures and futures options: Open a fixed term account, money balancing, one or two trades. The tool is described as follows:

  1. Open a Securities Account

Step 1: Go online to Futu and sign up for a new account.(Register now)

Step 2: Open a securities account on the basis of a Futu account.(Open account now)

開設美股賬戶,即享過千元開戶獎賞
OPEN A US STOCK ACCOUNT AND ENJOY A THOUSAND DOLLAR ACCOUNT OPENING REWARD


2. Open a futures account

Currently only registered securities account users are supported.Open a futures account;

Users who have already opened a securities account can click the trade button on the futures or futures option details page. Activation of unopened futures categories will be initiated. After activation, futures, Hong Kong futures options and CME options can be traded.

>> OPEN A FUTURES ACCOUNT TO RECEIVE FUTURES NEWCOMERS FOR A LIMITED TIME

3. Funding Allocation

Currently, only funds are supported to allow futures accounts to have sufficient funds to trade.

Transfer of funds: After the funds are transferred from the securities account to the futures account, the funds will be transferred to the account in real time.

Instruments:APP > Account > Any Account Card > Transfer > Funds Settlement > Futu Securities (Hong Kong) Funds Settlement > Select Currency > Select Transfer/Transfer Account

4. Order Transaction

Futures: “APP > Markets > Select Futures Market at the top of the page > Click on the corresponding futures” or search for futures codes by searching the search button in the upper right corner.

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Terms and conditions apply right-arrow

The information contained herein does not constitute any offer, initiation, solicitation, opinion, or any guarantee to deal with any securities, funds, financial products, or any other instruments.

Futures contracts or options are derivative products. Trading in futures contracts or options are not suitable for many members of the public. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances. The risk of loss in trading futures contracts or options is substantial. In some circumstances, you may sustain losses in excess of your initial margin funds. Placing contingent orders, such as "stop-loss" or "stop-limit" orders, will not necessarily avoid loss. Market conditions may make it impossible to execute such orders. You may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, your position may be liquidated. You will remain liable for any resulting deficit in your account. You should therefore study and understand futures contracts and options before you trade and carefully consider whether such trading is suitable in the light of your own financial position and investment objectives. If you trade options you should inform yourself of exercise and expiration procedures and your rights and obligations upon exercise or expiry.

"Futubull" is a one-stop financial investment and trading platform. The securities trading service is provided by Futu Securities International (Hong Kong) Limited.

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