What you should know about trading indices?

Indices are a measurement of the performance of a group of shares that are listed on an exchange. As there is no underlying physical asset to exchange when trading indices, most indices trading is done with financial derivatives like CFDs.

What are the benefits?
  • Diversification of trading portfolio
  • Improving of trading potential
  • Exposure to an entire sector or economy at once
  • Hedging against a drop in the value of a share portfolio
  • Opportunity to benefit from market movement
  • Speculation on a group of shares for less than the cost of trading them individually

Stock indices are weighted averages reflecting the collective value of publicly-traded companies from a market or industry sector. The change in value of an index represents the fluctuation of the company stocks that make the index.

An index goes up in price if the overall value of the stock shares rises, and will go down in the event the overall value of those companies’ shares decline.

How to trade?

Traders can go long or short on a particular index. Traders go long when the stocks in that index market are likely to increase in the future, or go short if they think that the stock index is likely to drop in value.

You can trade Australia 200, Europe 50, France 40, Germany 30, Hong Kong 33, Japan 225, Netherlands 25, Singapore 30, Swiss 20, UK 100, US Nas 100, US Russ 2000, US SPX 500 and US Wall St 30 and more with ClydeTrade.