An index is defined as a portfolio of stocks that represents a particular market or market sector. Most major economies as well as developing economies have at least one financial index. For instance, the Dow Jones Industrial Average (DJIA), one of the most frequently used indices worldwide – is comprised of stocks from 30 of the largest companies in the US. It represents approximately 25% of the US market.
The value of an index is usually described in terms of a number of points. Each index is calculated in a slightly different way, but its value generally represents an average of the current values of its component stocks. The changing value of an index reflects the fluctuating values of the individual stocks that it is made up of. That’s why an index can be a good representation of the state of a country’s economy or of a specific industry.
To trade indices, traders can go long on a particular index if they believe that stocks in that market are likely to increase overall in the future, or go short on an index if they predict that the index is likely to drop in value.
Trading indices is usually made by means of futures and CFD contracts. They both allow trading on fluctuations of basic indices, but while dealing with CFD contracts you can trade fractional units. Thus, making deals becomes accessible to both small and large investors.
Dax1001 offers you to trade such well-known stock indices as Dow Jones Industrial, Standard & Poor’s 500, Nasdaq Composite, NIKKEI, and DAX 30. Our professional analysts will consult you regarding trading positions to be opened on this or that tool. If you want to train your skills in defining index movements without losing your assets, you may trade on a demo account.
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