Ten Benefits of Trading the S&P 500 Index

  1. You do not have to diversify with multiple stocks for equity exposure, the index is already diversified.
  2. The risk of any one stock having something catastrophic happen will not really hurt your trade. No one stock has more than a 3% weighting. 
  3. The S&P 500 is much harder to manipulate than individual stocks due to its size and volume of trading.
  4. The derivatives of the S&P 500 move much more smoothly around support and resistance areas than most individual stocks.
  5. The S&P 500 has its own survivor bias, replacing its holding of falling stocks with new ones that are growing in market capitalization.
  6. You do not have to deal with earnings surprises like in individual stocks.
  7. Due to the indexes much lower volatility, you can trade larger position sizes with much less risk.
  8. Traders can amplify their positions and movement in the index by using  mini or standard size futures contracts, or leveraged Equity ETFs. $SSO $SDS $UPRO $SPXU
  9. The $SPY and $SPX options are very liquid with very tight big ask spreads.
  10. With this index, you can trade the trend of the stock market itself, which is a much broader bet than any one company or sector.