How to start trading Stock Indices on FXCM? Table of Contents
What are Stock Indices?
Stock indices give you the opportunity to trade based on your idea of an economy without choosing individual stocks.
CFD is one of the most popular products for trading.
Express your views on the world’s largest stock indices with tight spreads and enhanced execution.
Start investing in Stock Indices on FXCM
Market Index is a collection of stocks
Historically, investors have had the need to analyze the overall market performance.
After all, you will never be able to make a statement on the US economy by looking solely at, for example, the stock of Apple Inc.
Because of this need, stock indices have emerged which represent the weighted average of selected top-performing stocks and intended to provide a quick glimpse of the market as a whole.
An index is a good way to look at particular markets, but it offers investors a way to gauge the performance of their individual portfolios so that specific investments that are underperforming can be adjusted to be more in line with the overall market trend.
Indexes can have several variables.
For starters, the number of stocks in any particular index can vary widely, from a few dozen to several thousand companies.
The price of an index is determined through weighting.
Price weighted indices are averages based on the price of each equity component.
Capitalization-weighted indices adjust the calculation based on the size of the companies included.
Many other factors are represented according to the stock index in question.
Today, there are hundreds of stock indices globally, representing companies nationally, regionally, globally, and even by sector.
Trade CFDs on Stock Indices on Margin
Investing in stocks has great appeal around the world but the barriers to entry can often be high.
Let’s say you want to invest in an economy through an index to track the performance of that economy.
You could simply buy the stocks in the index but this could be ineffective especially in terms of transaction costs with the broker.
Some may choose to trade on the futures market or trade the index through an ETF.
The ETF is a fund that has stocks of all stocks in the index.
With ETFs, you generally have a margin of 100% which means you have to put in the full value of the index to participate.
- FXCM’s index products, on the other hand, are traded as contracts for difference (CFDs). With CFDs, you can trade on margin. You put in a fraction of the capital and still get the full value of the transaction. But that is not all.
- Trading indices with CFDs removes barriers to trading. When trading futures markets, you have settlement periods. Short positions are generally impossible without a substantial account balance. Furthermore, the commissions of each transaction are significant.
- CFDs on indices, on the other hand, do not have settlement periods, it is possible to go short and pay only the spread. With CFDs, you can scale much easier, decrease your risk exposure, and are able to enter the market with lower capital requirements in your account.
How does Stock Index CFD work?
Unlike forex, when you trade an index, you simply buy or sell based on your opinion of how that index will move.
With FXCM, you only pay the spread to open a position.
FXCM does not impose any stop restrictions for most of FXCM’s products – you can scale the major indices.
In addition, the small amounts of FXCM’s contracts allow you to minimize your exposure to the market.
Do you want an ideal environment to trade the American, European, Asian, and Australian stock markets? FXCM offers scalpers, news traders and EA users access to enhanced execution on Index CFDs which FXCM believes can be regarded as one of the most unique offerings in the industry.
One of the most popular methods of participating in the capital market is to buy shares of companies or funds based on an index.
While such assets are the backbone of many investment strategies, they have several drawbacks.
High fees, substantial capital demand, and convertibility issues limit their activity for active traders.
Conversely, trading an advanced index CFD has several and unique advantages:
- Limited Trading Restrictions
- Reduced trading costs
- Availability of Leverage
- Variable amounts of transactions
Register with FXCM and Start trading online
Why trade Stock Indices on FXCM?
- No minimum distance on pending orders
- FXCM’s enhanced CFD execution allows you to trade without a minimum stop distance on most products including US30, NAS100 and the GER30. Most strategies are welcome.
- Lower Trading Cost
- Trade commission-free with no exchange fees – your trading cost is the spread.
- Margin Trading
- Set aside a fraction of the total trade amount for global indices. Look at the Margin Requirements.
- Micro CFD Trading
- Micro-contracts give you the flexibility to risk less per trade.
With FXCM indices you can also trade bear markets more easily than the stock market.
Do you think a market will go down? Sell it as easy as you can with bull markets.
Available Stock Indices for trading on FXCM
With FXCM, trading a CFD on a stock index is similar to trading forex.
All you need to know is the symbol and the size of the contract.
Index CFDs are financial derivative instruments that allow you to gain broad exposure to various markets but it is important to note that trading on margin on Index CFDs can not only amplify your profits but also greatly increase your losses.
Index CFDs can be a valuable asset to your trading strategy as you can take advantage of the price fluctuations of the underlying assets.
Look at the CFD symbols on Indices below to see a list of available products:
| AUS200 | ASX SPI 200 Future |
|---|---|
| CHN50 | SGX FTSE China A50 Future |
| ESP35 | IBEX35 Index Future |
| EUSTX50 | Euro Stoxx 50 Future |
| FRA40 | CAC40 Index Future |
| GER302 | DAX Index Future |
| HKG33 | Hang Seng Future |
| INDIA50 | SGX Nifty 50 |
| JPN225 | Nikkei 225 Dollar Future |
| NAS100 | E-Mini Nasdaq 100 Future |
| SPX500 | E-Mini S&P 500 Future |
| UK100 | FTSE 100 Index Future |
| US2000 | E-Mini Russell 2000 Future |
| US30 | E-Mini Dow Future |
| VOLX3 | Mini VIX Future |
See the available Stock Indices on FXCM
US2000
The underlying instrument of the US2000 is the E-Mini Russell 2000 Future.
The Russell 2000 Index measures the performance of 2,000 small and medium-sized companies within the Russell 3000 Index and is the most widely quoted benchmark for tracking the performance of mid-cap stocks in the United States.
US30
The underlying instrument of the US30 is the DJIA (Dow Jones) MINI e-CBOT.
The Dow Jones includes 30 major American companies: AMEX, Boeing, Chevron, Coca-Cola, DuPont, GE, Goldman Sachs, Intel, IBM, Microsoft, Nike, and more.
SPX500
The underlying instrument of the SPX500 is the S&P 500 stock market index, managed by S&P Dow Jones Indices, which includes 500 large American companies covering approximately 75% of the US stock market by capitalization, such as Delta, eBay, Halliburton brands, and Yum!.
The S&P 500 was developed and continues to be maintained by S&P Dow Jones Indices, a joint venture controlled by McGraw Hill Financial which publishes a number of stock market indices, such as the S&P Midcap 400, the S&P SmallCap 600 and the S&P Composite 1500.
NAS100
The underlying instrument NAS100 is the NASDAQ100 stock market index.
This index includes 100 companies from a wide range of sectors, with the exception of those operating in the financial sector, such as banks and investment firms.
This includes companies such as Apple, Adobe Systems, Amazon, Cisco Systems, Google, Intel, Facebook, and others.
UK100
The underlying instrument UK100 is the FTSE 100 index future.
It is an index of the 100 companies listed on the London Stock Exchange with the largest market capitalization.
In the FTSE indices, stock prices are weighted by market capitalization, so that larger firms weigh more than smaller firms.
Companies include GlaxoSmithKline, HSBC, and Royal Dutch Shell.
GER301
The underlying instrument of the GER30 is the DAX index futures.
The DAX is a stock market index made up of the 30 major German companies traded on the Brancoforte stock exchange: BASF, SAP, Bayer, Allianz, and others.
ESP35
The underlying instrument ESP35 is the future of the IBEX35 index.
It is the benchmark index of the stock market of the Bolsa de Madrid, the main Spanish stock exchange.
This index includes 35 companies from a wide range of sectors: Banco Popular, Acciona, Bankia, Bankinter, Santander, Repsol, Gas Natural, Telefonica and more.
FRA40
The underlying instrument FRA40 is the future of the CAC40 index.
This is the Euronext Paris stock market benchmark: Airbus, Alcatel-Lucent, AXA, BNP Paribas, L’Oreal, Orange, Vivendi, Societe Generale, Renault, Michelin, Solvay and more.
HKG33
The underlying instrument HKG33 is the Mini-Hang Seng future.
This is the benchmark index of the Hong Kong stock exchange.
Four sub-indices have been established to make the index clearer and classify constituent companies into four distinct sectors.
Altogether there are 50 stocks that make up the HSI, including Hang Seng Finance Sub-index, Hang Seng Utilities Sub-index, Hang Seng Properties Sub-index, Hang Seng Commerce & Industry Sub-index.
JPN225
The underlying instrument JPN225 is the Nikkei 225 Mini future.
It is the benchmark index of the Tokyo Stock Exchange (TSE).
AUS200
The underlying instrument of the AUS200 is the S & P / ASX 200, which measures the performance of the 200 largest companies listed on the Australian Stock Exchange by adjusted free-float market capitalization.
EUSTX50
The underlying instrument EUSTX50 is the Euro Stoxx 50 Future.
The Euro Stoxx 50 is an index of listed European stocks designed by Stoxx Ltd, an index provider owned by Deutsche Börse and the SIX Group, which includes major European companies (Allianz, Deutsche Bank, Inditex, Repsol, Unilever, and beyond ) and is used as an indicator of the state of the European economy.
CHN50
CHN50 is based on the FTSE China A50 index.
The FTSE China A50 Index is a real-time tradable index comprising the largest 50 companies listed on the Shanghai Stock Exchange and Shenzhen Stock Exchange with ‘A’ shares.
This is the benchmark index for investors wishing to access and trade on the Chinese domestic market.
Please click "Introduction of FXCM", if you want to know the details and the company information of FXCM.
IronFX
Comment by Diletta
March 26, 2024
Awesome bonuses, good leverage. A few hiccups, but support rocks!