## The Three Assets in the US Stock Market: Your Comprehensive Guide to CFD Trading



In recent years, there has been a noticeable convergence between cryptocurrency markets and traditional financial markets. Today, you can directly access trading CFDs on major global indices through advanced platforms, where you can use USDT as margin instead of opening a complicated traditional brokerage account. Modern platforms offer 24/7 trading capabilities, with leverage up to 500x, opening new horizons for traders worldwide.

## Understanding the Difference: Indices vs. Individual Stocks and Futures

**What exactly are indices?**

An index is not a direct investment in a single company but an statistical measure reflecting the performance of a diverse group of stocks. It represents overall market movement or a specific sector, making it a reliable indicator of economic health.

**Quick comparison between products:**

| Product | Basis | Ownership | Leverage | Settlement | Features |
|---------|--------|-----------|----------|------------|----------|
| Index CFDs | Basket of weighted stocks | No | Up to 500× | USDT Margin | Directional trading, tight spreads, low costs |
| Tokenized Stocks | Single US stock | Price tracking | Varies by product | USDT | Close tracking of spot price |
| Futures | Individual stocks or indices | No | High | USDT | Perpetual contracts with financing fees |

**Which one to choose?**
- If you want to bet on the **overall market direction** (such as a rise in the tech sector), index CFDs are the best choice.
- If your goal is a specific company (like profits of a particular company), choose tokenized stocks or futures.

## Practical Steps to Start Trading

**1. Registration and Preparation**
Log into the platform and go to the advanced trading section dedicated to indices.

**2. Asset Selection**
You will find main options:
- US 100 (Nasdaq Composite)
- US 500 (S&P 500)
- US 30 (Dow Jones)

**3. Capital Management**
Convert an amount of USDT into your trading margin account.

**4. Opening a Position**
Choose your direction (buy or sell), set the leverage size, and place your orders either (market price or limit price).

**5. Take Advantage of Features**
Modern platforms provide deep institutional liquidity and very tight spreads, with very low transaction fees (around $0.09 per unit, with better rates for advanced users).

## The Three Assets: A Comprehensive Comparison

###Nasdaq Composite: Growth and Volatility

Nasdaq is not just an index but an expression of the "new economy." Tech stocks account for more than half of its weight, with the seven giants (Apple, Microsoft, Nvidia, Amazon, Meta) dominating most of the space. This means higher volatility and greater growth potential.

**When to choose Nasdaq?**
If you are optimistic about the tech sector, AI, and cloud computing, and can withstand sharp downturns (like a drop of more than 30% in 2022), it’s your choice.

**Typical performance:** Highest gains in emerging markets, but deeper losses in bear markets.

###S&P 500: Balance and Stability

Consists of 500 major US companies weighted by market cap, covering all sectors: technology, finance, health, consumer, industrials, and more. It closely represents the real US economy.

**When to choose S&P 500?**
If you seek broad exposure to the US market without high volatility risk, or if you are a long-term investor. The historical annual return is around 10%.

**Typical performance:** Moderate volatility, steady growth, used as a basis for most global fund portfolios.

###Dow Jones: Safety and Tradition

Includes only 30 globally recognized leading companies, weighted by price rather than market cap. Higher proportion of traditional sectors (finance, industry, energy) and less technology.

**When to choose Dow Jones?**
If you prefer stability and protection from sharp fluctuations, or want a healthy read on the overall economy without betting on a single sector.

**Typical performance:** Lower profits in rising markets, but less severe losses in declining markets.

## Critical Economic Events: Things to Watch

Trading index CFDs is highly sensitive to US economic news and monetary decisions. The following events can cause rapid moves between 50 and 200 points:

**Interest Rate Decisions (8 times a year) - Importance: ⭐⭐⭐⭐⭐**
The most impactful. Controls market risk appetite. Watch Federal Reserve policy data and statements carefully.

**Employment Data (NFP - Monthly) - Importance: ⭐⭐⭐⭐**
Strong jobs data means a stronger dollar and short-term pressure on indices. Expect false breakouts and sudden reversals.

**Consumer Price Index (CPI - Monthly) - Importance: ⭐⭐⭐⭐**
Higher-than-expected inflation suggests rate hikes, leading to index declines. The core index is most important.

**Producer Price Index (PPI - Monthly) - Importance: ⭐⭐⭐**
A leading indicator predicting CPI movements the next day.

**GDP Growth (Quarterly) - Importance: ⭐⭐⭐**
Strong growth boosts stock profits but may raise fears of rate hikes.

**Retail Sales and PMI (Monthly) - Importance: ⭐⭐**
Supporting indicators reflecting consumption and economic momentum.

**Golden Tip:** Reduce your position size or stay out of the market 30 minutes before and after major events. Volatility increases and risks rise.

## Final Summary

Modern trading platforms have opened the door for millions to participate easily in trading major global indices. Whether you are optimistic about tech and AI growth, an investor seeking stability and broad exposure to the US economy, or a conservative portfolio focused on safety, there is an index suited to your style.

**Risk Warning:** Trading CFDs involves high leverage and strong volatility. You may lose all your capital. Carefully assess risks, manage your trade sizes wisely, and avoid over-leveraging. Review full details on the platform’s official website.
View Original
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
  • Reward
  • Comment
  • Repost
  • Share
Comment
0/400
No comments
Trade Crypto Anywhere Anytime
qrCode
Scan to download Gate App
Community
English
  • 简体中文
  • English
  • Tiếng Việt
  • 繁體中文
  • Español
  • Русский
  • Français (Afrique)
  • Português (Portugal)
  • Bahasa Indonesia
  • 日本語
  • بالعربية
  • Українська
  • Português (Brasil)