Indices
What Are Indices? Trading indices (or stock indices) are measurements of the value of a group of stocks from a particular exchange, sector, or region. Rather than trading individual stocks, traders can speculate on the overall performance of a market via these indices. Popular Global Indices INDEX REGION DESCRIPTION S&P 500 USA 500 largest US companies Dow Jones (DJIA) USA 30 major US companies NASDAQ 100 USA 100 largest non-financial companies on NASDAQ FTSE 100 UK 100 top companies on the London Stock Exchange DAX 40 Germany 40 top companies on the Frankfurt Exchange Nikkei 225 Japan 225 major companies on the Tokyo Stock Exchange Hang Seng Hong Kong Major companies in Hong Kong ASX 200 Australia 200 top companies on the Australian Securities Exchange How Index Trading Works? CFDs (Contracts for Difference): Most popular method; allows speculation without owning assets. Futures: Agreements to buy/sell at a future date and price. ETFs: Exchange-Traded Funds that mirror an index. Options: Contracts offering the right (not obligation) to buy/sell the index. Why Trade Indices? Diversification: Exposure to a whole market, not just one stock. Liquidity: High volume and tight spreads in major indices. Volatility: Frequent price movements = opportunities for profit. Market Insight: Reflects broader economic sentiment. Risks Market volatility Leverage amplifying losses Geopolitical and economic events affecting indices