Explore Indices Trading At ETFinance

Indices trading

A stock market index, such as the FTSE 100 or S&P 500, is a listing of publicly traded companies, usually ranked by market capitalization. For example, the FTSE 100 Index is a list of the top 100 companies by market cap on the London Stock Exchange. As the stock prices of these companies rise and fall, their movement causes the index they are listed on to flutter a bit too. Therefore, in its simplest definition, indices trading is just the trading of a group of selected stocks that are clustered together, generally on one of the world’s major stock exchanges.

How to Trade Stock Market Indices

As with stocks, currencies and other assets, there are lots of ways to trade indices. However, you don’t invest in an index in the same way as you would buy stocks, because an index is more of a mathematical construct used to describe performance of a collection of companies.

 

You can invest in an index via mutual funds, tracker funds or derivatives. The latter, which includes the innovative CFD (contract for difference), is one of the most popular methods of indices trading online.

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Examples of Indices Trading

Like other investments, indices trading involves a degree of speculation on whether the index will rise or fall. Trading CFDs lets you take advantage of that uncertainty. For example, if you go long, you believe the index will rise in a given timeframe. Alternatively, you will go short, which is another way of saying short selling, if you believe the index will fall in value. For instance, if the FTSE 100 was priced at 7,257.00, you might take a short position on it falling by the end of the day. If the FTSE 100 fell to 7,157.00, you would make a profit.

Of course, it’s important to remember that all trading can be impacted by a variety of economic, technical and political factors. Understanding these aspects can make the difference between successful trades and unsuccessful ones. If you don’t have the knowledge you think you need to be a successful trader, invest in picking up the information you’re lacking.

 

Be sure to use the wealth of resources on our platform to help you make smarter and more informed trades on stock market indices and other assets.

CFD Trading on Stock Market Indices at ETFinance

Stock market Indices are particularly suited for CFD trading, as the daily price movements can allow for quick and potentially successful trading. In addition, this type of derivative means you don’t need to purchase the underlying asset, making it cost-effective and yielding other possible advantages like relief of paying certain taxes depending upon your region’s laws. At ETFinance, traders have the opportunity to trade CFDs on major global indices online with leverage (borrowed capital for trading), as well as competitive spreads.
Plus, at ETFinance you will have the chance to trade on a range of asset types including CFDs on stock and indices such as Nasdaq 100, CAC 40 and the FTSE 100. Other options include Forex currency pairs CFDs, stock share CFDs, commodity CFDs and cryptocurrency CFDs.
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Discover the indices trading via CFDs at ETFinance now