2025 US Basic Index Perfect Guide

Understanding the Basics of U.S. Futures Indices

U.S. Futures Indices refer to indicators that aggregate the prices of multiple stocks into a single figure. For example, the Nasdaq 100 Index combines the stock prices of the 100 largest companies listed on Nasdaq by market capitalization and trading volume.

The main futures indices in the U.S. are three:

S&P 500 Futures - Targets 500 large-cap, highly liquid companies listed on the New York Stock Exchange and Nasdaq. It is the most actively traded in the U.S. futures market and serves as an important indicator of global financial market volatility.

Nasdaq 100 Futures - Includes only Nasdaq-listed companies, with a high proportion of tech-related stocks. It has trading volume comparable to the S&P 500 and reflects trends in technology stocks.

Dow Jones Futures - Calculated as a simple average based on 30 blue-chip companies on the NYSE. It is useful for gauging the overall health of the U.S. economy.

Reasons Why U.S. Futures Indices Are Focused on as Trading Targets

Market Movement Prediction

Futures are products that trade prices at a specific future point in time. If you can accurately predict market direction, you can generate profits. Additionally, futures indices tend to move ahead of the spot market, allowing early insight into future spot market trends.

Position Risk Management and Hedging

Futures trading allows for diversification of price fluctuation risks. When a decline in a specific index is anticipated, selling futures can offset potential losses. Unlike individual stock futures, U.S. index futures follow overall market trends, reducing the risk of individual losses. When tech stocks generally rise, some companies may still decline, but index futures offset these individual fluctuations.

Leveraged Trading Expansion

Leverage involves borrowing funds from a broker to increase trading size. For example, using 1:10 leverage, you can open a position worth 10 million won with only 1 million won.

Advantages: Achieve higher returns with less capital. A product with a daily volatility of 0.1% can yield 1% profit with 1:10 leverage, and 10% with 1:100 leverage.

Caution: The fact that profits can be 10 or 100 times larger also means losses can be amplified similarly. Beginners should start with low leverage and avoid using high multiples without confidence.

Rich Trading Volume

Futures indices have fixed expiration dates and are traded frequently. High liquidity allows opening or closing positions at desired times, with quick order execution reducing slippage( and the difference between expected and actual transaction prices). However, high trading volume also means sudden, unpredictable price swings can occur.

How to Start Actual Trading

Choosing a Trading Platform

Domestic Securities Firms: All services are provided in Korean, and there are hedged products that eliminate currency risk. You can easily find funds or ETFs based on U.S. indices by searching for “futures.” Hedged products are usually marked with “(H)”.

Global Trading Platforms: Enable trading using leverage and CFDs, accessible anytime via web or mobile apps.

Developing a Trading Strategy

Trend Following Strategy - Trades follow the current upward/downward trend. Buy in an uptrend, sell in a downtrend.

Counter-Trend Strategy - Trades against the expected trend reversal. If the reversal point is accurately identified, significant profits are possible, but failure can lead to large losses; recommended for experienced traders.

Arbitrage - Exploits price differences between futures and spot indices. For example, if futures are more expensive than the spot, sell futures and buy the spot. High market volatility increases risk, so thorough analysis is essential beforehand.

Using Analytical Techniques

Technical Analysis - Analyzes price charts to identify trends and support/resistance levels. Uses technical indicators like moving averages, Bollinger Bands, MACD, and chart patterns. While methods are well-established, there is a risk of overlooking fundamentals.

Fundamental Analysis - Examines corporate financials, economic indicators(GDP, inflation, interest rates), political situations, etc. It helps understand the fundamental reasons behind price movements but can be complex, and actual prices may behave differently from expectations.

Using both techniques complementarily based on the situation is most effective.

Checking Trading Costs

Fees - Vary by broker; verify in advance. Additional fees may apply for CFD or leveraged trading.

Currency Risk - Since U.S. futures indices are dollar-denominated, currency conversion can lead to exchange losses. If the exchange rate moves favorably, you can seek gains or fully hedge against currency risk with hedged products.

Taxes - Tax treatment varies depending on the trading product and whether trading through domestic securities firms or overseas platforms(. It is important to confirm beforehand.

CFD vs. Futures Contracts: Which Is Better?

) CFD Trading

CFD### Contracts for Difference( are products that do not involve owning the actual asset but calculate only the price difference between the start and end of the trade. If you buy and the price rises, the difference is your profit.

Advantages: No need for actual ownership, 24-hour trading, no expiration, high leverage possible.

Disadvantages: Relatively high fees, lower liquidity, slippage risk, requires specialized knowledge.

) Futures Contract Trading

Futures involve agreeing in advance to buy or sell an asset at a predetermined price at a specific future date. Settlement occurs at expiration.

Advantages: High liquidity, suitable for hedging.

Disadvantages: Limited trading hours, existence of expiration date, subject to capital gains tax.

Which Index Should You Choose?

Selection depends on individual investment goals and risk appetite.

Long-term Investment: Dow Jones Futures - Relatively stable.

Seeking High Returns: Nasdaq Futures - Higher returns in bullish markets, but caution needed during tech downturns.

Following Overall Market Trends: S&P 500 Futures - Most actively traded with moderate volatility.

Current market conditions should also be considered. If tech stocks are declining or expected to decline, approach Nasdaq futures cautiously, with thorough technical and fundamental analysis beforehand.

Outlook and Investment Perspective for 2025-2026

The U.S. is the world’s largest economy and a financial leader. Recently, political and economic variables have increased stock market volatility, but major U.S. indices futures have shown long-term upward trends and are expected to continue rising.

However, precise predictions for 2025-2026 are difficult due to the complex interplay of Federal Reserve interest rate policies, economic indicators, political situations, and international affairs.

It is essential to stay updated with economic news and securities firm analysis reports regularly and monitor fundamental factors periodically.

In Summary

U.S. Futures Indices attract many traders due to their high liquidity, leverage potential, and ability to anticipate market movements. Choosing the right platform, developing strategies, and thorough analysis are key to profitability. Prioritize risk management and build experience step by step.