How index trading works
https://youtu.be/XRHQTNQcPtY
How Index Trading Works: A Beginner's Guide to Futures
Learn how index trading works in the second part of the US day trading session.
Index trading lets you speculate on the performance of stock market indices (like the S&P 500, Nasdaq-100, or Dow Jones) without buying individual stocks. The most common way is through futures contracts traded on exchanges like the CME (Chicago Mercantile Exchange). These are standardised agreements to buy or sell the index at a future date, but most traders close positions before expiration for profit/loss based on price changes.
How Futures Work (Basics)
Futures are derivative contracts:
Long or Short: Go long (buy) if you expect the index to rise. Go short (sell) if you expect it to fall.
Leverage: You don't pay the full value upfront. Deposit "margin" (a fraction, e.g., 5-10%). This amplifies gains/losses.
Tick Value: Each point move has a dollar value. Profit/loss = points moved × tick value × contracts.
Expiration: Contracts expire quarterly (March, June, September,...







