The Best Forex broker for S&P 500 - eToro
Top S&P 500 Forex brokers 2024:
eToro - Biggest copy trading community in the world (over 3,000 verified investors with copiers)
OANDA - Best for trading with advanced technical analysis tools (TradingView charts support)
IG Markets - Favorable Forex trading conditions (0 fees, avg. EUR/USD spread - 0.8)
Trading.com - Farouble Forex trading conditions (leverage up to 1:50, 70+ currency pairs)
FOREX.com - Diverse range of tradable assets (80+ currency pairs)
Interactive Brokers - Best broker for international investors (assets from 33 countries, 150+ markets)
The S&P 500, a widely recognized stock market index, tracks the performance of 500 leading publicly traded companies in the US. It serves as a crucial gauge of the US stock market's overall health and attracts a global audience of investors.
Traders can access the S&P 500 through several instruments, including ETFs, options, and futures contracts. These options allow speculation on the index's price movement without directly buying the underlying companies' stocks.
Traders Union has prepared a list of Forex brokers that offer trading on the S&P 500 stock index under favorable trading conditions and are regulated accordingly.
Warning:
There is a high level of risk involved when trading leveraged products such as Forex/CFDs. Between 65% and 82% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
| Brokers | Platform | US Indices | Index ETFs | All trading assets | Regulation | |
|---|---|---|---|---|---|---|
MobileTrading, WebTrader |
Currencies, assets of stock and commodity markets, cryptocurrencies |
CySEC, FCA, ASIC |
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WebTrader, MetaTrader4, Mobile platforms, MetaTrader5 |
FX, Indices, Bullion, Commodities, Crypto |
FSC (BVI), ASIC, IIROC, FCA, CFTC, NFA |
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MetaTrader4, API, ProRealTime, IG Trading Platform |
Forex; CFDs on indices, commodities, and stocks; |
FCA, BaFin, ASIC, MAS, CySec, FINMA, BMA, CFTC, NFA |
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MT5 |
Currency pairs (57), CFD on shares (1200+), commodity group (8), indices (14), metals (2), energy resources (5) |
FCA, CFTC, NFA |
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FOREX.com, MT4, MT5 |
Forex, cryptocurrencies, indices, commodities, stocks |
CIMA, FCA, FSA (Japan), NFA, IIROC, ASIC, CFTC |
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Trader Workstation, IBKR Mobile, APIs |
Stocks, options, futures, currency, metals, bonds, ETF, mutual funds, CFD, EPF, Robo-portfolios, hedge funds |
SEC, FINRA, SIPC, FCA, NSE, BSE, SEBI, SEHK, HKFE, IIROC, ASIC, CFTC, NFA |
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Active Trader Pro |
Shares, commodity assets, exchange-traded (ETF), mutual and investment funds, options, futures, bonds, annuities, fractional shares |
US Securities Commission (SEC), SIPS |
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Thinkorswim |
Over 70 currency pairs |
FINRA, SIPC, CFTC, NFA |
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MT4, MT5, R MobileTrader, R StocksTrader, R WebTrader |
Forex (currency pairs), ETFs, index CFDs, oil CFDs, CFD on European and U.S. stocks, real securities |
FSC |
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Pocket Option, MT5, MT4 |
Binary options and CFDs on currency pairs, cryptos, indices, stocks, and commodities |
MISA |
The eToro broker was founded in 2007. The company promotes itself as a social trading platform working with traders from over 140 countries. The broker has several divisions operating under different jurisdictions and licensed by different regulators. For example, eToro (Europe) is licensed by the Cypriot regulator CySEC (109/10) and eToro (UK) is licensed by the British regulator FCA (583263). The broker also has a representative office in Australia and the USA. eToro Profile Details
👍 Pros
• the minimum transaction amount for copying is $1;
• handy functionality for passive investing;
• regulated by independent monitors;
• it is possible to purchase contracts for fractional shares (that is, to invest amounts less than the cost of one share);
• it is possible to buy shares at once (not CFDs) on the US stock exchanges.
👎 Cons
• high spreads;
• periodic technical failures in order execution;
• lack of the most popular platforms such as MetaTrader 4 and MetaTrader 5 in Europe and the CIS;
• no access to ECN systems, orders are processed only according to the STP (straight-through processing) scheme with access to specific liquidity providers;
• there is a commission for withdrawing funds;
• impolite support staff;
• inconvenient website.
| 🚀 Minimum deposit: | $100 |
| 💻 Trading platform: | Mobile Trading, WebTrader |
| 💱 Spread: | From 2 points |
| 📊 Accounts: | Standard and demo |
| ⭐ Trading features: | Cryptocurrency trade; Structural investment portfolios; Copy Portfolios; Trading Central. |
The name OANDA is an acronym for “Olsen & Associates” or “Olsen AND Associates”. It is registered in the United States and provides its clients with a wide range of financial services in most countries of the world. The company was founded in 1996 and is currently regulated in four jurisdictions. The main regulator of the broker is the UK Financial Conduct Authority (FCA). Oanda Canada is licensed by IIROC. The company has several significant awards to its credit, including a victory in the category "Best Forex Trading Technologies" from the UK Forex Awards, "Best Trading Platform" from FX Week, as well as "Best Customer Service" from the US Foreign Exchange Report.
👍 Pros
• Minimum deposit from 1 dollar.
• A large selection of the most popular trading instruments.
• Several reliable and reputable financial regulators.
👎 Cons
• Inconvenient and poorly functioning site.
• Lack of cent accounts.
• Lack of bonus programs.
| 🚀 Minimum deposit: | |
| 💻 Trading platform: | WebTrader, MetaTrader4, Mobile platforms, MetaTrader5 |
| 💱 Spread: | From 0 points |
| 📊 Accounts: | Standard, Core, Swap-free, Premium, Premium Core |
| ⭐ Trading features: | Advisors; Availability of a demo account; A large number of training materials. |
IG Markets has been providing brokerage services for retail traders since 2014. It was established in 1974 in London to work with professional traders. It is a part of the IG Group with representative offices in 17 countries. IG Markets stocks are traded on the London Stock Exchange as a part of the FTSE 250 index. The broker is regulated by FCA (Financial Conduct Authority | the UK), CySec (Cyprus Securities and Exchange Commission), ASIC (Australian Securities and Investments Commission), BaFin (the Federal Financial Supervisory Authority | Germany), FINMA (Swiss Financial Market Supervisory Authority), and NFA (National Futures Association). The IG Group global representative office is supervised by BMA (the Bermuda Monetary Authority). The broker provides services of trading Forex and different CFDs through MetaTrader 4 and its in-house platforms for retail and professional traders.
👍 Pros
• Regulated activities and participation in compensation funds;
• No minimum deposit requirements when opening an account with the international division;
• Leverage is available for trading currencies and CFDs;
• Wide range of trading assets and markets;
• Fee rebates for new and active existing clients with large trading volumes;
• Floating spreads from 0.6 pips for retail Forex traders;
• Bonuses for new clients and partnership programs for different client categories.
👎 Cons
• The broker can reject opening accounts to traders with low capital or insufficient knowledge of derivatives trading;
• Deposits and withdrawals can’t be made with e-wallets, electronic payment systems, or cryptocurrencies;
• Trading conditions differ for various countries, so you have to look for the broker’s website in your country.
| 🚀 Minimum deposit: | $1 |
| 💻 Trading platform: | MetaTrader4, API, ProRealTime, IG Trading Platform |
| 💱 Spread: | From 0.4 points |
| 📊 Accounts: | Demo and CFD |
| ⭐ Trading features: | Leverage depends on the instrument and the regulator; |
Trading.com is a UK broker whose full name is Trading Point. Previously, it was called XMUK, but in 2019 it was rebranded and the company began to operate under its new title: Trading.com. The company offers to trade six asset classes such as currency pairs, metals, as well as CFDs on stocks, stock indices, commodity futures, and energy resources. More than 1,250 assets are available in total. The main office is located in London, the broker is regulated by the FCA (Financial Conduct Authority), and its registration number 705428.
👍 Pros
• Favorable trading conditions - average spreads in major pairs are 0.6 pips.
• No commissions.
• Moderate requirements compared to the size of the minimum deposit. You can start trading when you deposit at least $5 to your account.
• MetaTrader 5 desktop and mobile platforms, as well as a web terminal, are available for trading.
• Reliable FCA regulation.
👎 Cons
• The broker only provides services to UK citizens.
• The absence of PAMM and MAM accounts for passive investing.
• The absence of bonuses, training programs.
| 🚀 Minimum deposit: | $5 |
| 💻 Trading platform: | MT5 |
| 💱 Spread: | From 0.6 points |
| 📊 Accounts: | Ultra-Low Standard, Ultra-Low Micro |
| ⭐ Trading features: | $5/month – payment for inactivity on the account |
Forex.com is a company owned by GAIN Capital Holdings, Inc. (NYSE: GCAP) and has earned a reputation as a reliable broker in the trading industry for its transparent work and high quality of services. The company cooperates with clients in 140 countries. The broker is registered in the Cayman Islands and supervised by CIMA (Certified Institute for Management Accountants). The license number is 25033. The parent company of the Forex.com broker is registered in England and Wales under the number 1761813 at the UK Companies House. It is licensed by one of the most reputable regulators in the world, FCA (No. 113942).
👍 Pros
• average rate of order execution is 0.04 ms;
• reliability is controlled by several regulators so customer funds are kept on separate accounts from the company's assets;
• attractive trading conditions are tight spreads on over 90 assets, including currency pairs and metals, and over 4,500 markets, including FX, indices, commodities, stocks, and cryptocurrencies.
👎 Cons
• poor quality of site optimization, little specifics in the descriptions of services, tabs at the top of the page do not work. To find the information you have to use a tab called "Sitemap";
• it is difficult to contact the support service due to its high workload;
• large fixed commission for withdrawing funds;
• high initial deposit, it starts from $1,000;
• there are few options for depositing and withdrawing funds, the terms rarely correspond to those stated.
| 🚀 Minimum deposit: | $1000 |
| 💻 Trading platform: | FOREX.com, MT4, MT5 |
| 💱 Spread: | From 0.2 points |
| 📊 Accounts: | Standard account, Commission account, Direct Market Access account (DMA) |
| ⭐ Trading features: | There is a cryptocurrency trading |
Interactive Brokers is among the best-known US investment companies, operating since 1977. The broker offers to trade currency pairs, but its basic instruments are stocks, CFD, indices, metals, ETF, futures, and other exchange market assets. You can also trade cryptocurrencies on Interactive Brokers. The company is regulated by the US Securities and Exchange Commission (SEC), the US Financial Industry Regulatory Authority (FINRA), the UK Financial Regulatory Authority (FCA), and other international financial regulation commissions. In 2020, the broker was awarded the "Best Online Broker” (Barron's) and "Best Broker for Economical Investments" (NerdWallet) titles and got five stars in the Online Stock Trading for Traders category (Canstar). Also, the broker is popular in other countries. Here you can read reviews of Interactive Brokers in Canada, Singapore, Australia, Hong Kong, Ireland.
👍 Pros
• wide range of training materials;
• access to 135 markets in 33 countries;
• a huge subset of trading instruments.
👎 Cons
• website interface is only partially translated into other languages;
• you have to pay for an inactive account;
• Support service does not work on Saturday and Sunday;
• long and complex registration procedure;
• no cent accounts for novice traders.
| 🚀 Minimum deposit: | |
| 💻 Trading platform: | Trader Workstation, IBKR Mobile, APIs |
| 💱 Spread: | From 0 points |
| 📊 Accounts: | Real, Demo |
| ⭐ Trading features: | Options, trading, CFD, ETF, EPF |
The S&P 500, or Standard & Poor's 500, is a stock market index that tracks the performance of 500 of the largest publicly traded companies in the U.S. It provides a broad overview of the U.S. stock market and serves as a key indicator of the U.S. economy's health.
Managed by S&P Dow Jones Indices, the S&P 500 represents a broad snapshot of the U.S. stock market, making it a crucial measure of the country's economic health. The S&P 500 is one of the most globally followed equity indices, often seen as a bellwether for the U.S. equity market. The index covers a range of sectors, including technology, healthcare, financials, and consumer discretionary, thereby reflecting the diverse American economy. This broad coverage makes the S&P 500 viewed by many investors as the best single gauge of the U.S. equities market.
Stocks, which the S&P 500 comprises, are ownership units in companies that have decided to list themselves publicly on stock exchanges. The primary goal of issuing these stocks is to raise capital. Investors trade these stocks, banking on their potential appreciation in value or the possibility of earning dividends. The practice of buying and holding stocks over a certain period can help individuals grow their financial portfolio and achieve long-term financial goals. If you're wondering how to buy an S&P 500 index fund, read the Traders Union article.
The S&P 500 is calculated using a market capitalization-weighted methodology where the stock price of each company is multiplied by its number of shares outstanding. These values are summed for all 500 companies and then divided by a proprietary divisor managed by S&P Dow Jones Indices.
In more detail, companies with larger market capitalizations have a more substantial influence on the index's overall performance. The market capitalization of a company is determined by multiplying the price of its stock by the total number of its outstanding shares. The accumulated values of all the 500 companies in the index are then divided by a specific divisor. This divisor, a proprietary figure developed by S&P Dow Jones Indices, is adjusted periodically to ensure the index's continuity. The adjustments compensate for structural changes in the constituent companies, like stock splits, special dividends, or spinoffs. Consequently, if a company's market capitalization rises due to an increase in its stock price, the value of the S&P 500 will likely increase, assuming all other components remain constant.
Investing in the S&P 500 via Forex brokers is an advantageous move for those seeking to diversify their portfolio and harness the growth potential of the U.S. economy. For beginners venturing into this form of investment, here are some detailed strategies and best practices to consider:
Use stop-loss orders. Stop-loss orders are essential in mitigating substantial and unforeseen losses when trading the S&P 500. This tool is the trader's predetermined order to automatically close an open position if the price reaches a specified level. The primary objective of stop-loss orders is to limit the potential loss on a trade, providing an element of control in volatile market conditions without constant surveillance. It allows traders to determine their loss threshold in advance, protecting them from further losses if the market moves unfavorably
Don't scale into losing trades. ”Scaling” refers to adding more to your position, intending to reduce the average entry price. However, this strategy should be executed cautiously. If a trade is progressing in your favor, increasing your position at technically favorable levels might be advantageous, such as during price pullbacks. This is known as “pyramiding” - a strategy that capitalizes on trends by increasing your investment size as the market moves in your intended direction. However, it's critically important to refrain from scaling into losing positions to average down the entry price, hoping for a market reversal. This could lead to substantial losses if the market continues to move against you
Manage your risk. Risk management is a fundamental aspect of successful trading and is particularly pertinent when dealing with volatile assets like the S&P 500. Traders should be fully cognizant of the risk associated with each trade and the impact of potential losses on their overall portfolio. An essential tenet of risk management is never to risk more than a small percentage, typically no more than 2%, of your trading account on any single trade. This strategy ensures that even if a trade goes against you, it will not severely impact your trading capital, thus allowing you to stay in the game
Monitor economic calendars. Economic calendars are valuable tools for traders as they provide scheduled dates of significant events that can influence financial markets, such as the S&P 500. These include economic data releases, central bank meetings, and earnings reports. To avoid trading during periods of high volatility, traders should keep an eye on these calendars and plan their trading activities accordingly. Significant events such as the release of non-farm payrolls or Federal Open Market Committee (FOMC) meetings can cause sharp price movements, which could lead to substantial losses without a well-defined trading plan
Develop a trading plan. A well-defined trading plan is the blueprint of your trading activities. It should detail your financial goals, risk tolerance level, and the strategies and criteria for entering and exiting trades. This plan is a personal guide that aligns your trading activities with your financial goals and risk tolerance level. It encourages discipline and helps prevent impulsive trading, often driven by fear or greed. By adhering strictly to your trading plan, you maintain control over your trades and limit potential mistakes
Keep a trading journal. A trading journal is a comprehensive record of all your trades, detailing parameters such as entry and exit prices, trade size, the strategy used, and the trade's performance. This journal serves as a reflective tool, allowing traders to review their past trades, understand their trading habits, and identify areas of strength and weakness. Regular review of the trading journal helps spot recurring patterns or mistakes, facilitating learning and continual improvement. By learning from past mistakes and capitalizing on proven successful strategies, traders can enhance their trading skills and profitability over time
👍 Advantages of investing in the S&P 500
• Benchmark index. The S&P 500 is widely considered the U.S. stock market performance industry standard. Top fund managers often strive to beat this benchmark with their portfolios, making it a reliable performance gauge for investors. Comparing your personal portfolio or investment fund against the S&P 500 can provide insight into how well your investments perform relative to the broader market
• Historical returns. The S&P 500 has historically delivered a robust return on investment. On average, the index has yielded an annual return of approximately 8.9% (inflation-adjusted) since its inception, making it a potentially profitable investment over the long term
• Accessibility. The S&P 500 is readily accessible to average investors. Numerous brokerage and retirement account providers offer index funds that track the S&P 500, making it easy for investors to gain exposure to the broader U.S. stock market
• Long-term growth trend. For long-term investors, the S&P 500 has shown a consistent "bull" trend since 1949, indicating a continuous growth pattern. This shows the market's resilience to bounce back after significant crises and lends confidence in the market's capacity for recovery and growth over time
• Dividends. All S&P 500 index funds pay dividends, providing investors a steady income stream. Most of these funds also allow a Dividend Reinvestment Plan (DRIP), enabling investors to compound their returns by automatically using dividends to buy more fund shares
👎 Disadvantages of investing in the S&P 500
• Market volatility. Investing in the S&P 500 entails exposure to market volatility. Historically, the market has experienced downturns approximately every 7-10 years. While recoveries often follow these downturns, they require investors to have a high-risk tolerance and the ability to weather periods of market instability
• Alternative strategies. While the S&P 500 has historically provided robust returns, other investment strategies, and assets may offer similar or better returns with lower risk. These might include a diversified mix of stocks, bonds, and alternative investments
• Uncertainty of future returns. While the S&P 500 has shown a consistent upward trend over the long term, it does not forecast future performance. Investors should understand that past performance does not indicate future results, and market irrationality can persist for extended periods, potentially leading to losses
Traders Union applies a rigorous methodology to evaluate brokers using over 100 quantitative and qualitative criteria. Multiple parameters are given individual scores that feed into an overall rating.
Key aspects of the assessment include:
Regulation and safety. Brokers are evaluated based on the level/reputation of licenses and regulations they operate under.
User reviews. Client reviews and feedback are analyzed to determine customer satisfaction levels. Reviews are fact-checked and verified.
Trading instruments. Brokers are evaluated on the range of assets offered, as well as the breadth and depth of available markets.
Fees and commissions. All trading fees and commissions are analyzed comprehensively to determine overall costs for clients.
Trading platforms. Brokers are assessed based on the variety, quality, and features of platforms offered to clients.
Other factors like brand popularity, client support, and educational resources are also evaluated.
Find out more about the unique broker assessment methodology developed by Traders Union specialists.
The best place to buy S&P 500 index funds would be a reputable brokerage offering low fees and a user-friendly platform. You can find such brokers in our ranking, as it presents companies with the most favorable trading conditions and regulation that is appropriate for your country.
The best way to invest in the S&P 500 is through an index fund or an ETF that tracks the S&P 500. This allows for broad market exposure with a single investment.
You can buy an S&P 500 index fund through a brokerage account. After opening and funding your account, search for the index fund of your choice and place a buy order.
Yes, you can invest in the S&P 500 without a broker through some companies' Direct Stock Purchase Plans (DSPPs). However, it's more common to use a broker or a robo-advisor.
Alamin Morshed is a contributor at Traders Union. He specializes in writing articles for businesses who want to improve their Google search rankings to compete with their competition.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).
