Indices Trading

Indices Trading

Online Indices Trading with AvaTrade

AvaTrade offers the world at your fingertips, so it should be no surprise that we also offer a large range of stock indices, covering markets around the world. By trading with AvaTrade, you have direct access to competitive spreads and generous leverage, along with fast execution and a secure trading environment where you can trade global indices around-the-clock. With so many index CFDs to trade, you can easily diversify your trading portfolio and find potentially profitable trading opportunities in the markets.

Join AvaTrade and trade CFD indices online from around the world and enjoy competitive spreads. AvaTrade is an award-winning, regulated broker that goes above and beyond for each one of its traders.

What Are Indices?

Stock index CFD markets are financial instruments that represent the value of the underlying publicly traded companies of a group of stocks. One of the largest leading indexes in the world is the S&P 500, which reflects the total value of the top 500 companies trading on the New York Stock Exchange. If the overall value of these companies’ shares rises, the price of the S&P 500 index will go up. One of the most liquid and active futures contracts is the E-mini S&P 500, which is what the CFD derivative is a representative of.
Obviously, with AvaTrade being one of the leading global brokers, you also have the ability to trade other indices from around the world as well, including the Chinese HSI, Japan’s Nikkei, Germany’s DAX, the Dutch AEX, and many others. This gives you the ability to play the strengths and weaknesses of global economies, just as you would in the currency markets. For example, if there is some type of political trouble in Taiwan, you can simply short the MSCI via the CFD indices market, without having to go into the futures markets, pay the exorbitant fees, or worry about data connections. At the same time, perhaps you recognize that Australia is having a bit of an economic boom. If that’s the case, then you could go long on the SPI 200, which is the representative index for the top 200 Australian companies.

By going long or short on indices, you do not have to worry much about the performance of individual companies since you are trading on the entire market. For example, if you are trading the SPI 200 index, you do not have to worry whether BHP Billiton is rising or falling, or perhaps if the Bank of Queensland is declining. You mitigate a lot of the excess risk by trading on the entire group of companies as opposed to the individual stocks of each company. Index CFD trading is based on directionality and not the specific stocks in that market.

Indices highlights:

  • Availability of US, European, and Asian stock indices
  • The ability to go long or short in these markets
  • Leverage of up to on index trading, much larger than futures
  • Intuitive MetaTrader 4 platform available for desktop, tablet, and mobile trading
  • Enjoy the security of UK trading with a globally regulated broker
  • 24/5 multilingual customer support

The Value of Diversification

Diversification has become much more crucial since the financial crisis of 2008. Far too many people lost a fortune in their retirement and trading accounts by simply placing all their capital into one investment. As a result, portfolio diversification has become a natural extension of this, and the index CFDs market offers an alternative to putting too much risk in one place. In addition, you have the added benefit of trading with leverage. This leverage of course, can work both ways, offering great financial gains, but causing larger financial losses. You should always use leverage with caution and respect.

The world’s largest economies all have futures markets attached to their indices, and at AvaTrade, we have you covered. These markets give you the ability to profit by both buying and selling, and in various sizes, allowing the benefits of these instruments to be enjoyed by both large and small index traders alike.

Our broad selection of shares indices CFDs include:

  • S&P 500 – (United States) The largest index in the world, and one of the most popular
  • NASDAQ 100 – (United States) The top 100 companies on the NASDAQ, ex-financials
  • DJ 30 – (United States) The top 30 industrial companies listed in the United States
  • CAC 40 – (France) The top 40 companies listed in France
  • DAX 30 – (Germany) The leading 30 companies in Germany
  • FTSE 100 – (United Kingdom) The top 100 companies in the United Kingdom
  • FTSE MIB – (Italy) The index of the top companies in Italy
  • Russell 2000 – (United States) Small-cap stocks in the United States
  • DJ Euro Stoxx50 – (European Union) A broad-based index of the top 50 stocks in the EU
  • SMI – (Switzerland) The 20 leading companies publicly traded in Switzerland
  • Nifty 50 – (India) One of the two main stock indices used in India
  • Nikkei 225 – (Japan) The top 225 companies in the Japanese stock market
  • Ibex 35 – (Spain) The top 35 companies in Spain
  • HIS – (Hong Kong) The leading companies in Hong Kong
  • SPI 200 – (Australia) The top Australian companies
  • Dollar Index – (United States) A basket of currencies used as a measure of the US dollar strength
  • AEX – (Netherlands) The top Dutch companies listed publicly
  • Vix index – measure of the market’s expectation of near term volatility of the prices of S&P 500 stock index options

As you can see, AvaTrade has a huge selection of stock market indices that you can trade in the convenience of the CFD market. By using the contract for difference markets, you have the ability to trade much smaller positions than you would be forced to with in the futures market. Quite frankly, once you try the CFD market, you will wonder why you were not here to begin with! After all, we are simply speculating, not trying to own a particular asset. You can simplify your trading by using online share index CFDs.

Why Trade CFDs?

The advantages of trading the CFD market over the futures market, or some type of ETF, are numerous. In addition, the number of benefits continues to grow as the CFD markets mature. The CFD market allows a trader to buy or sell financial instruments without actually having to own the underlying instrument. CFD markets include commodities, stock, or in the case of indices, shares CFDs; the value of the underlying index is traded. Either way, they all have one thing in common: they are an agreement between two parties to pay or collect the difference between the opening and closing prices of the traded asset.

As an example, a trader could open a trade on the CAC 40, believing that it’s price will increase. If it does in fact go higher in value when the trader wants to sell, they will earn the difference between the buy and sell prices. If the trade goes against them, and the index loses some value, they will pay the difference between the buy and sell prices. Since you are not actually buying the asset, the cost of transactions are much lower, and there are no restrictions in trading short. To top it off, the investment can be leveraged up to on some contracts.

The ability to trade the appropriate size for risk management is one of the crucial advantages to trading the CFD markets. For example, one standard futures contract for the E-mini S&P 500 is $12.50 per tick. For those trading a smaller account, this is simply far beyond the reach of their ability due to risk-management constraints. A move of 10 ticks against their account would cost $125 in equity, which is obviously a fair amount of money if it’s only a $1,000 account. However, if you are trading the CFD market, you can tailor the size of your investments. This is a crucial part of risk management, something that is difficult to achieve with a standard futures account.

Beyond this, you do not have the exchange fees that you would be required to pay if you were trading on a futures platform. If you are simply trying to speculate on an underlying instrument, there’s no need to pay the extra costs involved in trading the futures contract when you can simply trade the CFD market with a reasonable spread, lightning fast execution, and probably more importantly – the ability to tailor your trade size. This is where AvaTrade takes centre stage!

Feel free to review our extensive education section to learn more about the CFD markets, and their many benefits. You will find that our educational resources go into great depth about the CFD market, and how to trade indices online.

AvaTrade – The Broker of Choice

When you trade stock indices CFDs at AvaTrade, you have an award-winning broker on your side. A highly respected and time-tested partner in these markets is crucial, and our track record speaks for itself.

Trading stock index CFDs at AvaTrade is only one of the multitude of reasons that traders continue to join our trading family. The ability to trade currencies, stock CFDs, cryptocurrencies, bond CFDs, commodity CFDs, index CFDs, and of course spot forex and options, means that you have the entire financial world at your fingertips.

At AvaTrade, we make it simple and convenient for you to diversify your trading portfolio. Whether you choose to trade share index CFDs, the EUR/USD currency pair or Google stocks, everything can be done from the comfort of our powerful and intuitive trading platforms. When you have all of these moving pieces available for your online trading activities, you can build a truly global and complex portfolio to take advantage of the interconnected markets. By having a wealth of choices, the possibilities truly are endless for AvaTrade clients.

Start indices trading now! Enjoy competitive spreads and the benefits of trading indices with a regulated and award-winning broker – AvaTrade!