To The Moon

Hey, tigers:

Today is the first day of our column "Learn US stocks by numbers".

In this article, I will introduce five practical knowledge of US stock trading.

(1) The US stock market-know where you are trading;

(2) US stock trading index-to understand the whole market overview;

(3) Regulators of US stocks-to understand the safety of US stock trading;

(4) Star industries and companies in the US stock market-understand the good investment direction;

(5) The rise and fall of US stock trading-understand the characteristics of US stock trading.

Firstly, three trading markets of US stocks

A stock exchange is a place where stocks of listed companies are traded. It is a bit like a farm product market.

What are the major trading markets in the US stock market?

Here, you need to know about the three major exchanges: the New York Stock Exchange (NYSE), the Nasdaq Stock Exchange (Nasdaq), and the American Stock Exchange (AMEX).

The New York Stock Exchange is a stock exchange located in New York City, which is the largest stock exchange in the world based on the total market capitalization of listed companies.

For example, $Genius Group Limited(GNS)$ (a company located inSingapore）IPO in NYSE.

The Nasdaq exchange is the second largest in the world. The Nasdaq exchange is popular because of its intelligent and modern trading system, which is now listed by most of the world's technology giants, such as$Apple(AAPL)$$Alphabet(GOOG)$ , $Amazon.com(AMZN)$ and$Microsoft(MSFT)$ .

The American Stock Exchange, "ASE" or "AMEX", is the only exchange that can trade stocks, options and derivatives at the same time, and the only exchange that provides services for small and medium-sized companies.

Secondly, the three major indexes of the US stock market.

There are three major stock indexes in the U.S. stock market, namely the Dow Jones Industrial Average Index , the S&P 500 Index and the NASDAQ 100 Index.

(1) The Dow Jones Industrial Average Index

The Dow Jones Industrial Average Index, launched in 1896, is the oldest of the three major stock indexes and one of the most famous stock indexes in the world. There are 30 stocks in the DJIA, all of which are large-scale or well-known listed companies, including Goldman Sachs, McDonald's, Microsoft and Boeing.

The DJIA is compiled to provide investors with a measure of the rise and fall of the stock market and an indicator of the economic cycle. Under the technical background at that time, the DJIA adopted the "Price weighted" calculation method. Simply put, it is to add up the share price of each constituent stock and divide it by the total number (30).

In this way, the stock price of the constituent stocks determines its weight on the index, so the trend of the index is easily affected by the stock price of individual listed companies.

(2)The S&P 500 Index

In the market, the S & P 500 index is widely regarded as the best index of the three major indexes to measure the U.S. economy.

Because the constituent stocks of the S&P 500 index cover 505 listed companies in the United States, involving more diversified companies and related industries, it is relatively more reflective of the overall changes in the market.

The S&P 500 index covers a wide range of companies and industries, and the compilation method is more reasonable, which can better reflect the overall performance of the U.S. stock market, so it is also used as a performance comparison object by many funds.

(3)The NASDAQ 100 Index

The Nasdaq 100 index covers 100 "non-financial stocks" listed on the Nasdaq exchange, of which technology companies account for half.

In terms of calculation, the Nasdaq 100 Index adopts the "float-adjusted market cap weighted" method, and also has a quarterly position adjustment system, which can better reflect the trend of high-tech stocks in the United States, so it is also regarded as a vane reflecting the trend of high-tech companies in the US.Currently, the top three components of the Nasdaq 100 Index are Apple, Microsoft and Amazon, accounting for nearly 30% of the index weight; the top ten technology companies account for more than 50% of the total weight.

Thirdly, the regulators of US stocks.

There are a lot of regulators in the US stock market, and as an investor, the SEC is one of the institutions you have to understand.

The SEC（http://website:www.sec.gov/), known as the U.S.Securities and Exchange Commission, is an independent U.S. government agency funded by the U.S. Congress.

Simply put, the SEC is the regulator of stock market trading, and we can regard it as the "police" of the capital market. It not only supervises listed companies, but also supervises insider traders and financial fraud to protect the legitimate rights and interests of investors.

Fourthly, what are the star companies in the US stock market?

Most of the star companies in the US stock market are concentrated in these four industries: information technology, energy,health care and consumer staples.

The first is the information technology industry, such as software & services, technology hardware & equipment, semiconductors & semiconductor equipment are all branches of this industry. There are many big players in this industry, such as Apple, Microsoft, Amazon, Google, $NVIDIA Corp(NVDA)$ and so on.

The second is energy, whose branches include energy equipment & services and oil, gas & consumable fuels .

The star companies in this industry are Exxon Mobil Corporation, Chevron, Shell and so on.

Then there is health care, which has branches of health care equipment & services, pharmaceuticals, biotechnology & life sciences. The star companies in this industry include the world's leading medical giants such as $UnitedHealth(UNH)$ , $(Johnson & Johnson)$, $(Pfizer)$, $(Merck Pharmaceuticals)$ and so on.

Finally, there are consumer staples, with branches such as food & staples retailing, food, beverage & tobacco, and household & personal products. The star companies in the essential consumer goods industry include well-known companies such as $(Wal-Mart)$, $(Procter & Gamble)$, $Coca-Cola(KO)$ and $(Pepsi)$.

The products of these star companies appear in all aspects of our life, and the products they develop are popular all over the world, which attracting us to invest.

Fifthly, the price limit of US stocks.

In U.S. stock trading, there is no price limit. We often see some stocks that rise more than 50% every day.

Of course, we can also see stocks that fall more than 50%. Many investors feel that it is very cool to speculate in U.S. stocks. They can rise more than 10% a day. It is common for many stocks to jump more than 20% in the earnings season.

But if a stock moves too much, it could trigger a trading halt, known as the circuit breaker. Its function is to step on the "brake" when the stock market fluctuates sharply, so as to prevent investors from making unreasonable emotional transactions and causing market panic.

For example, in March 2020, in the face of the continuing spread of the epidemic, the U.S. stock market has experienced four circuit breakers during this period.It should be noted that the market circuit breaker is that the S & P 500 index triggers the trading limit to suspend trading; when the S & P 500 index falls by 7% or 13% from the previous day's closing point, the stock market in the US will be suspended for 15 minutes, and when the index falls by 20% from the previous day's closing point, the stock market will stop trading that day.

In addition to the suspension of trading in the market, stocks may also trigger a suspension of trading. There are two kinds of suspension of stock trading, namely, non-regulatory mandatory suspension and regulatory mandatory suspension. For example, if the company announces a major event or the stock rises or falls by more than 10% within 5 minutes, it may trigger a pause, but this kind of pause will not be too long, usually a few minutes or more. Its purpose is to give the investment time to digest and absorb the news and avoid sharp fluctuations in the stock.

However, if the SEC imposes a regulatory suspension of stock trading, it is difficult to say, depending on the circumstances.

Ok, this is my share of practical knowledge of US stocks. I hope it can help you to understand the us stock market quickly.

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