Trade Indices CFDs

Trade Indices CFDs
INDICES

Trade Indices with
an Award-Winning
Broker

Click here

for a full list of our Indices
and typical spreads

Online CFD Indices trading is a great way to access the world's biggest stock markets. Every stock exchange in the world has a benchmark stock index, and traders in South Africa can now participate in those global markets using advanced trading platforms such as MetaTrader 4 and MetaTrader 5. Indices are an effective measure of the overall performance of a particular stock market and allow traders to invest in a market, or segment of a market, rather than individual stocks.

The NASDAQ and NYSE in the United States are two of the biggest financial markets in the world. At FP Markets, you can trade Indices CFDs including the US100 (NASDAQ 100), US500 and US Dollar Index. Within the same trading platform, traders in South Africa can then access other markets such as the Australian Stock Exchange (ASX) and Frankfurt Stock Exchange through their respective major indices - the ASX200 and DAX30.

Partnerships with leading financial institutions ensure a deep liquidity pool and allow FP Markets to provide traders in South Africa with the best available market prices. Cutting-edge technologies deliver ultra-low latency order execution and provide transparency with respect to price fluctuations.

Trading US stocks are no longer limited to people on Wall Street and residents of the United States. Retail traders across the United Kingdom are now able to trade global indices quickly and efficiently without actually purchasing the underlying asset. Indices CFDs are can be used to both diversify your portfolio and hedge your risks. Learn more about how CFDs work.

What are the benefits of
Indices trading?

  • Trading CFD indices allows you to speculate on the direction of movement of an underlying index without actually having physical ownership of the asset.

  • The ability to trade in both bullish and bearish prices creates additional trading opportunities.

  • Gain increased exposure through leveraged CFD products

  • Advanced trading platforms such as MetaTrader 4, MetaTrader 5 and Iress offer access to live streaming prices, cutting-edge technical analysis and charting tools.

,
Shares &
cryptocurrencies on competitive spreads in unparalleled trading conditions.

FP Markets offers much more than Indices trading! We also offer Forex,

,
Shares &
cryptocurrencies on competitive spreads in unparalleled trading conditions.

What is the Best Platform to Trade Indices?

MetaTrader 4, MetaTrader 5 & WebTrader. The world’s most popular trading platforms.

Discover the benefits of Indices trading on MetaTrader 4 (MT4)

can be seen across every facet of the trading platform. Its customisable interface, wide range of trading tools and advanced capabilities make it the platform of choice for traders in South Africa and abroad. The presence of a mobile trading app for Android and iOS devices makes it ideal for retail investor accounts.

Customisable interface, including colours of technical indicators


Traders Toolbox - suite of 12 online trading tools

One-click trading


MarketWatch


Live price streaming on Live accounts and Demo accounts with 128-bit encryption ensuring secure trading


Expert Advisors (EAs)


Customisable alerts


Compatible with iOS, Android and Mac devices

Are there more platform options?

We recommend MetaTrader 4 for Indices CFDs but also offer a wide range of products
can on our MetaTrader 5 and Iress platforms.

Why Trade
Index CFDs with
FP Markets?

Accessible

& Affordable

Benefit from our low-cost, competitive margins,
starting at just 1%.

Convenient

Contract Size

With an exposure of $1
per point movement, cash
index contracts allow you to
precisely tailor your position
size according to your risk
management profile.

Zero

Commissions

The cost of cash index
contracts is built into the
bid-offer spread.

Hedge

Risk

Diversify your portfolio
by trading CFD indices
and hedge your risks.

index-trading

What is Index Trading?

Stock market indices give the measure of a specific stock market, or segments of a particular market. They represent the value of a group of stocks from a particular country and represents the performance of a specific set of stocks. Every stock exchange in the world has a benchmark stock index, while some have several. A number of individual stocks are grouped together by segment or market capitalisation to form an index.

For instance, the FTSE 100 tracks the share price of the top 100 companies listed on the London Stock Exchange, in terms of market capitalisation. Similarly, the ASX 200 tracks the share price of the top 200 companies listed on the Australian Securities Exchange (ASX), while the Hang Seng is the Hong Kong equivalent.

Traders turn to indices for several reasons. Through indices, they are able to measure the overall performance of a stock market or particular segment of a market. Indices use weighted sums and averages which is why these financial instruments are considered useful for hedging and portfolio diversification.

An Example of Indices CFD Trading

Suppose you want to trade CFDs, where the underlying asset is the US30, known as ‘’Dow Jones Industrial Average Index ” Let us suppose that the US30 is trading at:

us30-bid-ask-price

You decide to buy 5 contracts of US30 because you think that the US30 price will rise in the future. Your margin rate is 1%. This means that you need to deposit 1% of the total position value into your margin account.

In the next hour, if the price moves to 22100.00/22112.00, you have a winning trade. You could close your position by selling at the current (bid) price of US30 which is 22100.00.

In this case, the price moved in your favor. But, had the price declined instead, moving against your prediction, you could have made a loss. This continuous evaluation of price movements and resultant profit/loss happens daily. Accordingly, it leads to a net return (positive/negative) on your initial margin. In the loss scenario where your Free equity, (account balance + Profit/Loss) falls below the margin requirements (1105), the broker will issue a margin call. If you fail to deposit the money, and the market moves further against you, when your free equity reach the 50% of your initial margin the contract will be closed at the current market price, known as "stop out".

Notice how a small difference in price can offer opportunities to trade? This small difference is known as "pip" or "percentage in point". For Indices trading, 1 pip is equal to a price increment of 1.0 which is also called an Index point.

short-long-bid
If the price
of FTSE 250
To You could Gain or Lose
for a Long Position
Resulting in a Return
of the Initial Margin
Rises by + 1% 22300.80/22312.80 USD 1044 299.33%
Declines by -1% 21859.20/21871.20 USD -1164 199.22%

Benefits of Index Trading

Indices provide an accurate and reliable way to gauge overall market sentiment. They can also act as benchmarks against individual stock portfolios. Traders can gain exposure to a particular stock market or a specific sector within a market.

Index trading reduces the risk of the performance of a single stock impacting an entire portfolio. Indices are also a straightforward way to invest as they do not require extensive research on a large group of individual stocks.

Price fluctuations of indices are smoother as they are not susceptible to intense spikes in volatility from a single stock. Indices CFDs provide additional trading opportunities through the option of trading in both rising and falling prices. Indices are commonly used during periods of high volatility events such as Brexit in the UK. Every trading plan should include trading strategies in anticipation of economic and political news that is likely to impact financial markets.

6 Reasons to Choose
FP Markets

An Australian Regulated Forex broker

Australian Regulated

Segregated client funds
& regulation in Australia

Tighter Spreads Market

Market leading spreads from
0.0 pips, 24/5

Faster Execution

Low latency
execution under 40ms

Advanced Platforms

MT4, MT5 & WebTrader with superior client portal

24/5 Multilingual
Customer Support

Award-winning support &
& personal account managers

Established in 2005

15+ years
trading experience

CFD Indices Spreads

Symbol Product Standard A/c Raw ECN A/c
Min Avg Min Avg
AUS200 Australia 200 index Cash 0.28 1.82 0.28 1.82
US30 US 30 Index Cash 0.41 3.56 0.41 3.56
EURO50 Euro 50 Index Cash 0.71 2 0.71 2
FRA40 CAC40 Index Cash 0.8 1.96 0.8 1.96
GER30 German 30 Index Cash 0.31 1.73 0.31 1.73
HK50 Hang Seng Index Cash 1.55 04.09 1.55 04.09
JP225 Japan 225 Index Cash 1.91 8.74 1.91 8.74
US500 US 500 Index Cash 0.2 0.54 0.2 0.54
UK100 UK100 Index Cash 0.31 1.65 0.31 1.65
SPA35 SPA35 Cash Index 6.5 6.5 6.5 6.5
US100 US Tech 100 Index Cash 0.9 1.56 0.9 1.56
CHINA50 China A50 Index Cash 9.41 13.17 9.41 13.17
VIX Volatility Index 0.14 0.05 0.14 0.05
USD Index US Dollar Index 0.02 0.009 0.02 0.009

Direct Market Access (DMA) Indices CFD Spreads

Available Indices
NASDAQ 100 E-Mini DJIA E-Mini (CBOT) Mini SPI 200
Nikkei 225 (CME) DAX Index SPI 200
S&P 500 E-Mini EURO Stoxx 50

Dividends Adjustments

If you hold an open Long position on a Cash Index CFD contract that pays a dividend, you will be entitled to an amount equal to the amount based on the number of contracts you hold after the close of the business day before the ex-dividend date.

Conversely, if you hold an open Short position in a Cash Index CFD which pays a dividend, you will be required to pay an amount based on the number of contracts you hold after the close of the business day before the ex-dividend date. This adjustment may be made either as a cash adjustment into your MetaTrader 4 or MetaTrader 5 trading account or included into the end of day swap rate.

How are Stock Market
Indices Calculated?

Financial experts and investors use a range of different methods to calculate Stock Indices. Some of the more popular methods are:

Market Capitalisation
Weighted Method

In this method, the stocks listed on the Index are weighted using the market capitalisation of each company. The S&P 500 and ASX 200 are major Indices that employ this method.

The Equal Weighted
Method

As indicated by its name, equal weightage is given to all the stocks based on their returns. The returns on each stock are calculated, added together and then divided by the total number of stocks on the Index.

The Price Weighted
Method

This model uses the price of applicable stocks to get a weighted average. Stocks with a higher share price are given greater weight, irrespective of market capitalisation. The Dow Jones in the United States uses the price weighted method.

What are the Most
Traded Indices?

FP Markets offers trading in more than a dozen of the world's largest, and most
trades global Indices.

Dow Jones: The Dow Jones Industrial Average often referred to as ‘the Dow’, is a price-weighted index of the 30 largest companies listed on stock exchanges in the United States. Salesforce, Boeing and Walt Disney are among the companies that make up the index.

S&P 500: Tracks the 500 largest US stocks and is weighted by market capitalisation. Well known companies on the S&P 500 include Amazon, Apple, Microsoft, Alphabet and Tesla.

FTSE 100: Is made up of the 100 largest stocks by market capitalisation on the London Stock Exchange. It is commonly referred to as the Footsie and includes major financial institutions such as Lloyds and Barclays.

ASX 200: Also weighted using market capitalisation, the ASX 200 is also maintained by Standard & Poor's and is the benchmark for equity performance in Australia.

How to Identify What
Moves an Index’s Price

Several factors which can influence
Indices markets

Movement in its Constituents: Significant price movement in the stocks included in a particular index is the biggest reason for a change in the value of the index.

Economic News and Data: Market news relating to economic data can affect stock markets and their benchmark Indices. This includes releases of key economic data relating to inflation, unemployment, and futures markets. Key information can be found in the Economic Calendar.

Political News: Elections, changes to monetary policy and trade relations are among the political factors that can impact financial markets and key components of them such as Indices.

Changes in Composition: The addition or removal of stocks from an index can cause fluctuations in its value.

Sector Specific: There are a wide range of sector specific Indices such as the NASDAQ 100 which does not include any companies from the financial industry.

Why Trade Indices

Trading opportunities: Through CFDs, traders can benefit from both rising and falling Indices prices.

Hedging: Indices can be particularly useful for hedging strategies as you can invest in an index of a particular sector. If the portfolio of a trader was made up of stocks from the financial sector, they could trade the NASDAQ 100 to counter any significant price movements in their current portfolio.

Diversification: Indices CFDs allow traders to gain exposure to global markets without having to invest in individual stocks. Australian traders can invest in the DAX 30 (Germany) or the Hang Seng (Hong Kong) to gain exposure to other markets.

Leverage: The ability to trade using leverage is one of the key attractions of CFD trading. Traders can open positions of a much higher value than the funds available in their trading account. Learn more about Margin Trading.

How to Trade Indices

A simple way to trade Indices is via CFDs using an online trading platform. These financial instruments allow traders to speculate on Indices without owning the underlying asset. FP Markets offers Indices trading through

, the world's most popular CFD trading platforms. For further information, check out How to Trade Indices.

Trade Indices CFDs
- FAQ

Trading Costs: With CFD trading you do not take ownership of the underlying asset. This reduces the overall costs associated with trading.

Less Volatile: As they are made up of a number of different stocks, Indices are not as susceptible to sharp changes in value.

Leveraged Trading: Enables traders to gain larger exposure to Indices by depositing only the margin required to open the trade, rather than the full value of the position.

Find out more about the Benefits of Indices CFDs and how to trade them.

Open a trading account now and trade the global markets!


bullet Access 10,000+ financial instruments
bullet Auto open & close positions

Take advantage of rising and falling markets
bullet News & economic calendar
bullet Technical indicators & charts
bullet Many more tools included

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