Learn About Futures Insider for October 13, 2011: S&P 500

The S&P 500 is one of the widely recognized indices and its futures contract and corresponding electronic mini contract remain among the most popular on a global scale. As inferred by its name, this index of 500 of the largest companies in the US includes recognizable names like AT&T and Chevron and may be widely regarded as an indicator for equities markets. While exploring the overall S&P 500, specifications will refer to the futures contract traded on the CME.
Contract Size: $250 x index price

Price Quote & Tick Size: Minimum fluctuation is 0.10 index points or $25

Contract Months: March, June, September, December

Trading Specs: Trades open outcry and Globex (electronic) per the following schedule:

Electronic: Mon -Thurs: 3:30 p.m.-8:15 a.m. (daily maintenance shutdown from 4:30 p.m.-5:00 p.m.) Sun: 5:00 p.m.-8:15 a.m. Central Time
Open Auction: Mon-Fri: 8:30 a.m. -3:15 p.m. Central Time

Daily Price Limit: RTH: Successive 10%, 20%, 30% limits (downside only)
ETH (overnight): 5% up or down

Please consult exchange for additional details on limits.

Trading Symbols: SP

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Past performance is not indicative of future results.
***chart courtesy of Gecko Software

The constituents of the S&P 500 are part of the large cap sector of the equities market and, since they include such a portion of the market, are often considered a representation of the market as a whole. Comprised of some of the largest companies in some of the largest industries in the world, members are classified according to the Global Industry Classification Standard (GICS) and the breakdown of sectors can be roughly illustrated as follows:
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The S&P 500 is maintained by an index committee which meets monthly and discusses statistics, candidates, and any corporate actions which may affect constituents. The committee selects member companies and although they try to avoid turnover the members are not always the same. Collectively by capital, members do comprise approximately 75% of the US equities market. The S&P 500 used to be a value-weighted index in which members or components were weighed by the overall market value of outstanding shares. Now a float-adjusted index, the value of the index is a reflection of the value of publicly available shares or those shares available to investors.

The most recent updates to the components include:

* July 5, 2011 - Accenture replaced Marshall & Lisley Corp
* Jun 1, 2011 - Alpha Natural Resources, Inc. replaced Massey Energy Company
* January 26, 2011 - Covidien replaced McAfee

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Historic price milestones for the S&P 500 index include the following:
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Key terms include the following:

Public Float - refers to the number of outstanding shares of a public company that are held by private investors rather than company officers and controlling-interest investors.

Large Cap - refers to companies which have a large market capitalization value (above $10 million), often calculated by multiplying outstanding shares by share price. Exact definitions or values may vary.

As a benchmark index, the S&P 500 can be used by fund managers, speculators, analysts and rating companies as a performance standard against which they can compare their own performance or the performance of others. The S&P 500 futures contract has also been used to accommodate a range of both speculator and hedger trading strategies.


For the futures contract on the S&P 500, the commonly watched factors which may affect trade include economic reports or events. This may include the following:

•Retail Sales
•Unemployment Claims
•Personal Income
•PPI
•CPI
•New Home Sales
•FOMC Meetings & Member commentaries

In addition to weekly and monthly reports, corporate earnings and activities such as mergers and acquisitions may affect price and volatility. There are nearly countless national and global events that can be considered in relation to how they may affect member shares and the overall index value.

Disclaimer: There is a substantial risk of loss in [You must be registered and logged in to see this link.] and it is not suitable for all investors. Losses can exceed your account size and/or margin requirements. Commodities trading can be extremely risky and is not for everyone. Some trading strategies have unlimited risk. Educate yourself on the risks and rewards of such investing prior to trading. Futures Press Inc., the publisher, and/or its affiliates, staff or anyone associated with Futures Press, Inc. or [You must be registered and logged in to see this link.] do not guarantee profits or pre-determined loss points, and are not held monetarily responsible for the trading losses of others (subscribers or otherwise). Past results are by no means indicative of potential future returns. Fundamental factors, seasonal and weather trends, and current events may have already been factored into the markets. Information provided is compiled by sources believed to be reliable. Futures Press, Inc., and/or its principals, assume no responsibility for any errors or omissions as the information may not be complete or events may have been canceled or rescheduled. Any copy, reprint, broadcast or distribution of this report of any kind is prohibited without the expressed written consent of Futures Press, Inc.