Trading Indices Online
Trading indices online is a great way to speculate on the world’s top financial markets and keep abreast of the top stock trading markets. Indices are financial derivatives that are calculated as a weighted average of share prices of top performing companies listed on the exchange. At AvaTrade you can find some of the top indices such as S&P 500, NASDAQ 100, FTSE 100, IBEX 35, MIB 40 and much more.
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AvaTrade Stock Index Trading
AvaTrade offers one of the largest ranges of stock indices of any online broker, covering markets around the globe. Join AvaTrade for online index trading with competitive spreads, leveraged trading and reliably fast execution.
- Trade the leading US, European & Asian stock indices
- Go long or short – trade your view on the market
- Get leverage of up to on index trading
- MetaTrader 4 platform for desktop, tablet & mobile
- Autotrading solutions available
- Enjoy the security of trading with a globally regulated forex broker
- Count on 24/5 multi-lingual client support
What Are Indices?
Stock index CFDs are financial instruments that represent the value of the underlying publicly-traded companies. One leading index is the S&P 500, which reflects the collective value of top companies trading on the NYSE. If the overall value of those companies’ shares rises, the price of the S&P 500 will go up.
There are also indices that represent smaller companies trading on the NYSE, such as Russell 2000 index, as well as indices for various stock exchanges around the world, from Chinese HSI, Japan’s NIKKEI to Germany’s DAX and Dutch AEX.
Stock Indices in Financial Markets
Stock indices track and measure particular baskets of related stocks. With thousands of stocks trading on the various major exchanges, indices provide an accurate and efficient way for investors to reliably track overall market sentiment as well as to benchmark against their individual stocks portfolios.
The advantage of trading indices over individual stocks, and using them in passive investment strategies, is that they offer exposure to an entire industry. Investors do not have to perform thorough research on individual company reports; they only need to take a bullish or bearish position, depending on the overall market sentiment. The price movement of indices is also a lot smoother as no one individual stock can induce an extreme price spike. This naturally makes index trading less volatile.
Still, due to the amount of activity that takes place on individual stocks, indices offer sufficient volatility for traders to pick out numerous profitable trading opportunities. This is especially true for day traders and news-based price action followers since indices often reflect the broad economic effects of both political and economic shifts.
For risk-averse and longer-term traders, index investing allows for easy and effective diversification. Instead of investing in just a few stocks, where risk is multiplied, index-based ETFs offer exposure to the entire stock market, while simultaneously reducing the risk of a single company negatively impacting your entire trading portfolio.
Current Leading Indices
AvaTrade’s selection of 19 stock index CFDs includes the most popular and frequently traded indices in the industry today:
- S&P 500 – The value of the Standard & Poor 500 is based on the share prices of 500 leading US-based companies
- DJIA – The index is price weighted average of 30 of the most significant stocks that are traded on the NASDAQ and New York Stock Exchange (NYSE)
- NASDAQ 100 – This index represents the value of 100 non-financial NASDAQ-traded companies
- FTSE 100 – The FTSE 100 is a collection of 100 of the largest publicly-traded UK companies
- DJ EURO STOXX 50 – Euro Stoxx 50 collects together 50 of the largest European companies’ share value
- NIFTY 50 – A representation of 50 major companies traded on the National Stock Exchange of India
Our Trading Conditions page details the full range of indices on offer, including spreads, trading hours and lot sizes.
Why Trade CFDs?
CFD index trading offers a number of benefits to the online trader. Trading CFDs (Contracts for Difference) allows you to buy or sell financial instruments without actually owning the underlying asset. These could be commodities, stock, or in the case of stock index CFDs, the value of the underlying indices.
A trader can place a buy order on, for example, the CAC-40. If the price of the index goes up, when he comes to sell he will earn the difference between the buy and sell price. If it goes down, the trader pays the difference.
Because the trader never owns the asset, the costs are far lower, there are no restrictions on short trading, and an investment can be leveraged by up to times.
How AvaTrade Can Help
You can visit the Education section to learn more about CFDs. Visit Sharp Trader, our one stop education portal for comprehensive online trading.
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