Indices are a combination of stocks put together as a portfolio to replicate the performance of the market segments. Investing in indices is considered safer than investing in a single stock. They serve as a benchmark for measuring the performance of the financial markets.
Through NG MetaTrader 5, we offer a secure, transparent, trustworthy, and user-friendly trading experience. With low deposit requirements and tight spread, you can start trading indices with ease. Our platform provides instant execution, multiple tradable assets and state-of-the-art tools to support your trading journey.
Whether you're an experienced trader or just starting out, NG MetaTrader 5 is here to help you on your indices trading adventure. Discover the potential of this lucrative market and start trading your favourite currencies effortlessly!
What are the Major World Indices ?
The most commonly traded indices are
- DJIA ( US30)
- S&P 500 (US500)
- NASDAQ 100 (NAS100)
- FTSE 100 (UK100)
- DAX (GER40)
Types of Indices
Capitalization weighted index
In a capitalization weighted index such as S&P 500, more weightage is given to stocks with higher market capitalization. The market capitalization of a company is calculated by multiplying the number of outstanding shares of the company by the share price.
Price weighted index
In a price weighted index, more weightage is given to stocks with higher prices. One of the best examples of such an index is DJIA (Dow Jones Industrial Average).
Equal weighted index
This type of index gives equal weightage to all the stocks regardless of market capitalization. Some examples are Guggenheim S&P 500 Equal Weight ETF, Russell 1000 Equal Weight Index, the NASDAQ-100 Equal Weighted Index, and the MSCI USA Equal Weighted Index.
Advantages of trading in Indices
Diversification
By trading in stock indices, you can access multiple market segments simultaneously, reducing reliance on a single stock and gaining broader market exposure.
Protect your existing portfolio
Investors with a diversified portfolio can use index trading to hedge against potential losses. Shorting an index through CFDs can offset losses in physical shares during market downturns, although it may also limit gains during market upswings.
Lower volatility
Indices are less volatile than other asset classes, as their price movements are balanced by the number of companies they represent. This can provide a more stable trading environment.
Extended Market hours
Unlike stocks which are available only in the particular market hours, Indices are available for extended market hours, ensuring increased flexibility and the ability to react to global events and market movements.
Trading both long and short positions
Indices can be traded in long and short positions, providing opportunities to profit from both rising and falling markets.
What are the advantages to trade in Indices?
Secure transactions
Newton Global follows the rules set by the jurisdictions in Mauritius Financial Service Commission, ensuring regulation compliance and earned licenses.
Tight spread and Zero Commission
Newton Global offers indices with lowest spread and attracts zero commission , which makes it one of the best available offers in the market.
Leverage
Newton Global offers higher leverage in the indices, allowing traders to invest a small initial amount instead of having to commit the total value of a contract, potentially generating substantial profits.
Best trading tools and application
You can make efficient stock trading decisions using Newton Global's indicators, enhancing your trading strategies.
Quick trading
In volatile market conditions, speed of execution is crucial. NG MetaTrader 5 allows you to open and close orders seamlessly with a single click, ensuring quick and efficient trading.
FAQ
The purpose of indices is to allow investors to evaluate the performance of securities, managed funds, and investment portfolios relative to the market.
The most commonly traded indices are DJI, S&P 500, and FTSE 100.
The most popular way to trade indices is via Contracts for Difference (CFDs). These financial instruments allow traders to profit from fluctuating rates, open a short (sell) position if the index is falling, and open a long (buy) position if they expect the index to rise.
No, NGCB offers Indices with the tight spread and Zero Commission.
Yes, Indeed. Successful index trading requires careful analysis, risk management, and a well-defined trading plan.However, it's important to note that like any form of trading, index trading carries risks.