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Choose from a list of global share baskets of industry-leading companies! Trade CFDs for underlying prices of popular index selections. Trade popular indices such as Dow Jones Index in U.S. or DAX40 in Germany with deep liquidity.

Indices, plural of an index, refers to a basket of different assets that are a sector or entirety of a market, most often of the same country.


What Is Indices Trading?


Indices, plural of an index, refer to a basket of different assets that are a sector or entirety of a market, most often of the same country. Corporations ranked high for their performance by independent institutions such as Standard and Poor's form a collective of their shares, not physically merging them but creating a more complex valuation system. By indices trading, traders directly interact with a segment of the market instead of shareholding in a single company. Trading indices allow traders to evade the possible high volatility of investing in a company by adding many other companies to the equation, thus limiting the potential impacts. 


What Are Indices In Trading? 


The most actively traded trading indices are often referred to as "Benchmark Indices" since they have a significant impact on global indices markets, and their stock indices are considered as an indicator of economic growth and performance. The most active Benchmark Indices are:

  • The FTSE 100: represents the U.K.'s largest 100 companies and is mostly referred to as "the UK 100."
  • Dow Jones: also known as "Wall Street," consists of the USA's 30 publicly-owned corporations.
  • The DAX: consists of Germany's prime 40 companies and is also referred to as the "German 40."
  • CAC40: more commonly called "France 40" and represents France's biggest capitalized 40 companies 
  • Nikkei 225: formed out of Japan's 225 price-wise leading companies, thus more often called "Japan 225."
  • NASDAQ 100: is a capital-oriented index that comprises even more than 100 tech industry companies in the USA, therefore also referred to as "The U.S. Tech 100."

Although every single member of the indices affects the performance of the index, indices trading limits any potential dire changes. In other words, trading indices allow traders to engage in stock marketing at a macro-alike level and to benefit from market movements. 


How Do Trading Stock Indices Work?


Indices trading functions fundamentally similarly to traditional stock market trading. Three different times are crucial in stock marketing; opening, lunch, and closing. These timings have a high volume of stock trading and, as a result, indices trading. Thus, trading indices hours are also limited to the opening and closing of the stock markets. 

Deciding which trading indices market to invest in is a matter of utmost importance to both novice and veteran traders. Indices trading is, expectedly, affected by political events, economic situations, and law regulations. This very nature of indices trading requires traders to be affiliated with news about the market they plan to enter and to stay updated as much as they can. 

After traders decide which indices they will invest in, the method should be determined. There are two widely used trading indices strategies; spread bet and contract for difference (CFD). Although these two are similar in many ways, there are a couple of nuances that mostly depend on the regulations of the country you are in, like taxation, etc. In very simple terms, a spread bet is to bet on a trading indices' direction for a limited time. Meanwhile, CFD is to get into a contract with trading indices in which certain stock market values of the index are set. 


What Is CFD Indices Trading?


CFD trading provides opportunities for traders to invest in changes in stock prices of stock markets. Unlike conventional stock market investing, CFD indices trading benefits from both climbing and shrinking prices. After excessive research on the index, traders choose a position, either selling (short) or buying (long). For instance, a trader noticed a potential climb in market values of trading indices X according to their research and opened a long position. The trader would benefit for every point at which they positioned the market value of indices X rises. The opposite is also possible when a trader notices a dip. Therefore, traders could profit from both diminishing and increasing stock market prices by investing in CFD indices.


How Are Profit and Loss Calculated In Investing CFD Indices?


Trading CFD Indices allows traders to invest in revenues by speculating on their stock market movements without actually owning any shares. This also means traders do not necessarily capitalize the whole cost of the market value of the revenue. The existence of such a margin in CFD Indices trading leads to a proportional profit/loss equation. In short, the multiplication of the total number of contracts, the value of each contract, and the difference between the opening and closing price are equal to the profit or loss.

Profit = (number of contracts)X(Value of contract)X(Opening Price - Closing Price)

Let's assume a trader foresaw a climb in stock values and bought 100 DAX contracts when the buying price was 5000. Each of the contracts costs 15$ per point. Every time DAX values increase a point, the trader earns 1500$. On the other hand, every diminishing point causes the trader to lose the same amount.

Why trade Index CFDs with FairMarkets?

The best thing about trading CFDs for indices is that you can take a long or a short position
in the market. Thus, you may take advantage of any price movement!

Our selection ensures deep liquidity and direct exposure to top conditions worldwide.
You can start trading Trade S&P 500 index or Dow Jones as easily as a few taps on your devices!

Top Conditions

Low spreads for
all index CFDs 
with top selection

Top Instruments

Trade CFDs for the
most popular indices
in Europe, UK and US

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  • Client Safety Member of the investor compensation scheme
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Is CFD Indices Trading Advantageous?

It is wise to keep the fact that every stock market investment, including shareholding and indices trading, involves risks. Evaluating and managing these risks are essential feats for CFD indices trading. However, CFD provides various advantages that limit the risks and increase versatility. Some of these advantages are:


  • Much easier to enter or leave the stock market.
  • Profitable day trading indices method
  • More flexible than traditional stock market investments
  • Depending on your country, might be more tax-efficient
  • Unlike options trading, trading CFD indices and commodities have no expiry
  • Requires only a tiny percentage of the actual stock market revenue as investment
  • Leverages are significantly higher in indices trading
  • Never actually owning any assets. Instead, earning revenue acquired from the change in the market price
  • Global market access
  • Fewer fees than traditional stock market investing
  • Steadily increasing trade volume and popularity.