Trade Indices

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

Index trading offers consolidated exposure to a wide variety of stocks in one sector or country with just one trade. Take Dow 30, NASDAQ 100, FTSE 100, S&P 500, and DAX 40 for instance.

Diversification in the index balances out the extreme fluctuations that arise during market volatility. While some of the constituent company’s share prices may fall over time, other company’s stock rallies might provide a cushion to the overall index.

Index values tend to vary across trading sessions, but indices are typically not seen to gain or lose considerable amounts apart from any major changes, for instance, broader market crashes, or natural disasters, or geopolitical events.

If a company's stock in your portfolio goes bankrupt, you could lose money on your investment. However, if you're trading an index, the company might be replaced by another that meets the criteria. The value of the bankrupt firm in the index may momentarily drop, or it might have no effect at all, depending on its weight in the index and the performance of its fellow participants.

Indices trading carries a lower risk when compared with trading in individual stocks. Thereby, individual investors, looking to save for retirement, often choose to trade indices within their investing accounts.

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.

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.

Why Trade Indices CFDs with Century Financial?

Tight spreads offer potential to profit from small price movements across 100+ indices

Flexible leverage to control your level of risk

Guaranteed stop loss (GSLO) features are available with some principals

Enjoy low spreads and high liquidity

24hr trading

Go long or short

Real-time pricing

Maximum exposure from minimal investment