Indices

By trading indices, traders insure themselves against unnecessary risk as they invest in a broad basket of assets rather than in a single company or industry (as when buying stocks, bonds, and currencies). In addition, a stock index is a very good indicator of market sentiment (bull market or bear market). After all, the composition includes shares of the world's major companies, if there are fluctuations in the markets, it is immediately reflected in the price of the index itself. The index shows the average price of the whole group. 

 

Advantages of index trading: access for traders with small capital; it is convenient to buy hundreds of shares at a time than to search/analyze shares of one company; instant diversification of portfolio.

 

Disadvantages of index trading: investments are always risks; you cannot add or remove stocks from the index; small profit compared to trading more risky assets.

   

Now there are a huge number of indices on the market. Still, among them, we can single out such popular ones:

• NASDAQ is an index that includes 100 US technology-related companies (no financial companies): Adobe, Cisco, Apple, Tesla, Microsoft, etc.
• S&P 500, based on the value of shares of 500 US companies: General Motors, Jp Morgan, Starbucks, Twitter, Visa, etc.
• JPN 225, the index is based on the prices of 225 shares of Japanese companies: Yamaha, Konica, Nikon, Kawasaki, etc.
• GER 30 - German index (July 1, 1988), the composition includes Bayer, BMW, Henkel, etc.
• Dow Jones - the first stock index was created in May 1896, then it included 12 major U.S. companies. Today it includes 30 major US companies.
  
  

Most indices are based on companies in a certain region. For example: S&P 500 includes US companies, FTSE100 index of the UK, CAC40 index of France, respectively, are a kind of barometer of these economies.

 

Some indices focus on a particular industry (Keefe banking index, FTSE 35 mining index), so traders can understand the overall prospects of the sector. Stock market indices accumulate large amounts of data that are of interest to other market participants.

 

Crises that have greatly affected the stock market: 2000 - the dot-com bubble, when technology stocks plummeted; 2008 global financial crisis (the US banking sector and the financial system collapsed); Coronavirus 2020 (the oil market showed a downturn).

 

Such recessionary periods show traders that it is crucial to manage risk. 

 

Our platform offers many functionalities for the trader that will help him to make a profitable transaction. For example, the platform offers fast registration; fixed spreads between buy and sell prices; real-time charts; leverage; analytical reports, and 24/7 customer support.

 

By registering right now, you will discover a global market with numerous investment opportunities.