Trading indices rather than individual equities enables the trader to speculate on the performance of the entire benchmark. Similar to Forex trading, indices can be traded by individuals as a tool to diversify their investments portfolio.
What are indices?
An index is a statistical measure of the changes in a portfolio of stocks representing a portion of the overall market. In other words, it is a benchmark value of a basket of stocks. It can get too difficult to track every single security trading in a country. Therefore, indices offer a workaround on this issue by sampling the market.
Why trade indices?
One of the main reasons to trade indices is that it reduces the risk from trading individual companies and it allows the trader to take a broader view of the group of companies. By trading global equity indices, a trader is able to geographically diversify his or her portfolio and potentially profit from the growth or contraction around the globe.
Benefits of trading Indices
- 16 indices to trade
- leverage of up to 500:1
Examples of Indices Regular Spreads
|US SP 500||0.6|
|US Tech 100||1.05|