Trade Indices | Index CFD Trading

Trade the most popular Indices around the world like S&P 500, NASDAQ 100, Dow Jones, FTSE 100, DAX 30, CAC 40 and other with leverage. Magnify the size of your trades without committing large amounts of capital. Leverage of up to 1:20 allows you to start trading CFDs with as little as £100 to gain the effect of £2,000 capital! Get free real-time streaming quotes on all Indices. Set price alerts and notifications on live quotes free-of-charge.

What are Indices?

Indices are a collection of stocks and instruments used to track the growth or trajectory of an industry or sector. These whole-sector tools allow us to look at how a chunk of the market is performing to better understand investment opportunities along with market fluctuations.

The S&P 500 (USA), DAX 30 (Germany) and FTSE 100 (UK) are a collective of each country’s largest companies based on their market capitalization. As an index tracks a basket of publicly traded stocks, by following the index, traders can understand the broad movements of the market and plan out their investment strategy accordingly.

Can I profit from index trading?

Indices rise and fall on a daily basis. Calculated by grouping together similar companies, traders’ use these tools as whole market or sector indicators to better understand market movements.

For example, after an announcement by Netflix, you predict that it will have a positive effect on the tech industry as a whole. You can open a Buy position on Plus500’s US-Tech 100, hoping to profit on this index’s movement. If the index does indeed rise, you can close your position and profit from the difference between your purchase price and closing price. On the other hand, if the index falls and you close your position, you will incur a loss.

If you predict that there will be a negative effect on the index, you can open a Sell position. If the price does indeed drop, you can close your position and make a profit from the difference. If the value of the index rises and you close your position, you will incur a loss.

Trading on indices can be an effective way to diversify trader risk, as it provides wider exposure when compared to trading on an individual stock.

When trading on a stock, fluctuations in the stock price are based on a large number of factors such as performance, revenue, and confidence in their ability to produce exciting products. When trading an index, a handful of poorly performing constituent companies do not necessarily affect the index’s value one way or the other. If a handful of constituent companies report losses or poor performance, it is still possible for the index to rise, depending on their weight. At the same time, if some companies report gains, the index may fall if a higher weighted company reports losses.

How to Trade on Indices

Trading Indices is a way to gain exposure to global, regional, or sector specific markets without having to analyse the performance of an individual company stock.

Plus500 offers CFDs on a variety of indices. Country indices, following the largest companies within a country’s economy, and sector indices which follow the top performers of a select industry. Plus500 also offers unique sector-specific indices.

Plus500 offers CFD traders the option to trade future contracts on some of the most popular indices.

A futures contract is a commitment to buy a specific asset on a predetermined date for a predetermined price. CFDs allow individuals to place Buy and Sell orders depending on whether they believe that an index will gain or lose in value.

In order to execute an index CFD trade, a trader must consider their position.

Buy - Executing a ‘Buy’ order means that you believe the instrument will increase in value. If the price of the instrument does indeed climb and you close your position, your profit is the difference between your ‘buy’ price and the closing price. On the other hand, if you close your position at a price that is lower than your ‘buy’ price, then your loss is the difference between your ‘buy’ and close price.

Sell - Executing a ‘Sell’ order means that you believe the instrument will decrease in value. If the price of the instrument does indeed drop and you close your position, your profit is the difference between your ‘sell’ price and the closing price. On the other hand, if you close your position at a price that is higher than your ‘sell’ price, then your loss is the difference between your ‘sell’ and close price.

Plus500 offers traders an opportunity to trade based on the value of these contracts, in the form of Contracts For Difference (CFD) instruments.

When you are ready to trade CFDs on Indices with Plus500, you can open the instrument and view the relevant instrument information such as charts, spread information, rollover details, and more.

Choose whether to open a ‘buy’ order if you believe the index will rise or a ‘sell’ order if you believe it will fall. Trading CFDs means you are not buying or selling the underlying asset but rather you are opening a contract on which direction you predict the market will move.

The Plus500 platform offers some trader-focused features to help you manage your trades. Some examples include an option to ‘close at profit’ which will automatically close your position at a specific level set by you in order to protect your profit, and ‘close at loss’ if you want to set a limit for the amount you are willing to lose.The ’close at profit’ and ‘close at loss’ features are free of charge, and do not guarantee your position will close at the exact price level you have specified.

Trade Share CFDs with Plus500

Plus500 trading platform allows you to trade shares from all popular markets such as Australia, USA, UK, Germany and more, with leverage and low spreads. Using our advanced trading tools, you can also control your profits and losses. Trade shares CFDs such as Facebook, Apple, Microsoft and Alphabet. Take advantage of falling or rising markets by opening Sell or Buy positions. Flexible trading in share CFDs. Leverage of up to 1:300 leverage allows you to start trading with as little as 100$ to gain the effect of 30 000$ capital!

What is online stock trading and how does it work?

Online stock trading means buying and selling shares of companies publicly traded on a stock exchange. The price of a particular stock is determined by the total number of shares a company has created, usually measured in the currency of the stock market it is listed on, for example, pence (in the UK), euro (in Europe), yen (in Japan) and US dollars (in the US). In line with the law of supply and demand, when there are more traders who want to BUY a company than SELL it, its stock price typically rises. Conversely, when there are more traders who want to sell a company than buy it, the stock price tends to decrease. To see a full list of shares CFDs offered by Plus500, click here.

What is stock CFD trading?

CFD trading on shares is a form of trading that enables you to speculate on prices of publicly-listed companies traded on exchanges such as the New York Stock Exchange, London Stock Exchange, NASDAQ and Tokyo Stock Exchange, without the need to own the underlying stocks. Another unique feature of stock CFD trading is the ability to increase your market exposure through leverage (or margin). This means you only need a fraction of the total trade value.

How do you start day trading on the stock market prices?

Follow these steps to start trading stock CFDs with Plus500:

  1. If you don’t already have a Plus500 account, open a Trading Account Here.
  2. Complete your account registration and documents verification, then deposit funds.
  3. To search for a specific stock, click into the search bar and type the company’s name or symbol.
  4. Consider placing stop orders in advance: you can define the level of profit you would be happy with and/or the level at which you would like to close out the position should the trend turn against you.
  5. Open a trade.