An index is a group of equities pooled together to track their collective performance. Typically, an index will represent large, medium, or small cap stocks for a country or a region. However, most often, large cap indices are quoted by the media.
Indices provide investors with a valuable benchmark to measure the performance of a specific market segment. They are calculated using various methodologies, with most being weighted by market capitalization, meaning larger companies have a greater impact on the index's movement.
Some of the world's most recognized indices include:
S&P 500 (tracking 500 large US companies)
NASDAQ Composite (focusing on technology companies)
FTSE 100 (representing the 100 largest companies on the London Stock Exchange)
DAX (tracking 40 major German companies)
Nikkei 225 (representing Japan's top companies)
When trading indices on FXTRADING.com, you're not buying the actual stocks within the index but rather speculating on the overall price movement of the index through CFDs (Contracts for Difference). This allows you to potentially profit from both rising and falling markets.
For more information about trading indices, please contact our support team through Live Chat in your Client Portal or email [email protected].