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What are Indices?
Indices are a measurement of the collective price performance of a group of shares in an exchange. Investors follow different market indices to analyse market movements. If, on average, the share prices of the constituent companies go up, the index will likely rise. And if they fall, it will likely drop.
For instance, one of the notable indices of the stock market, the FTSE 100 tracks the 100 largest companies on the London Stock Exchange (LSE). Trading indices help you to gain exposure across an entire economy or sector at one go.
How to trade Indices?
There are various indices available for trading that measure the performance of the stock market across countries, sectors, or types of commodities.
Indices trading offers the trader an opportunity to speculate the price movements of indices to make profits. Trading indices involves the use of derivatives like index futures, CFDs, and ETFs.
Trading CFD Indices
CFD index trading enables you to speculate on the price movements in indices, whether rising or falling, without taking actual ownership of the underlying asset.
Indices are one of the most highly liquid markets to trade, offering longer trading hours. This enables you to gain long exposure to potential opportunities.
The world's largest indices of the stock market based on the market capitalization of their constituents are the S&P 500 (SPX), Dow Jones Industrial Average (DJI), and Nasdaq Composite (IXIC).
Benefits of Indices Trading
What are Some Mainstream Indices?
There are seven types of indices to consider when trading indices — global, national, regional, exchange, currency, industry, and sentiment-based.
|Global||Tracks stocks of companies from various regions across different types of businesses||MSCI World Index, S&P Global 100, Russell Global Index|
|National||Tracks stocks of major companies listed on a country’s largest stock exchanges||United Kingdom: FTSE 100 Index
Japan: Nikkei 225 Stock Average Index
Germany: The DAX (Deutscher Aktien index) 40 Index
|Regional||Tracks stocks of companies across certain regions including North America, Latin America, Europe, Asia, to name a few.||Asia: S&P Asia 50 Index, FTSE ASEAN 40 Index
Europe: FTSE Euro 100 Index, S&P Europe 350 Index
|Exchange||Tracks stocks of companies listed in a particular exchange or group of exchanges||Euronext 100, OMX Nordic 40|
|Currency||Tracks variations in the value a currency against other major currencies across the globe||Euro Index, US Dollar Index|
|Industry||Tracks stocks of companies in an industry, say, finance, technology, utilities, among others.||NASDAQ Biotechnology Index, Wilshire US REIT Index, PHLX Semiconductor Sector Index|
|Sentiment-Based||Tracks investor expectations for fluctuations in the direction of stock prices||Volatility Index (VIX), Bullish Percent Index (BPI), High-Low Index|
Trade the World's Most Popular Stock Indices
Trade indices from exchanges all over the world with Century Financial. Choose from over 100+ cash and index futures, including the UK 100, US 30, and DAX 40.
Most popular Indices: FTSE 100, SPX 500, Dow Jones, DAX 40, DJIA, ITA 40, NASDAQ, CAC 40, RUSSELL 2000, HONGKONG 40.