Trading Index CFDs

What are Index CFDs?


Index CFDs are contracts for difference over equity indexes. A contract for difference, or CFD, is a type of derivative that allows a trader to gain a long or short exposure to a trading instrument’s price. While the trader does not own the underlying asset, they ‘own’ any movement in the price of that asset while they hold a position.

An Index is a basket of assets – in most cases stocks, but any assets can be included in an index. An index is usually weighted by the market capitalization of each company, with the largest companies having the most influence on the index value.

EightCap Index Trading

EightCap trader’s can access up to 10 major global market indices. These indices represent the overall movements of some of the largest markets and can all be accessed via EightCap trading platforms.

Index CFDsTrading SymbolTrading Hours (Server Time)
Dow Jones Industrial AverageUS3001:00 - 24:00
CAC 40 FRA4010:00 - 24:00
German stock index DAX 30GER3001:00 - 24:00 (Friday Close 23:00)
FTSE 100UK10001:00 - 24:00 (Friday Close 23:00)
Euro Stoxx 50 FutureEUSTX5001:00 - 24:00 (Friday Close 23:00)
NASDAQ 100NDX10001:50 - 24:00
S&P/ASX 200ASX20001:50 - 24:00
Nikkei 225JPN22502:30 - 24:00
Hang Seng (HSI)HK5001:00 - 24:00 (Friday Close 23:00)
Standard & Poor's 500SPX50001:00 - 24:00
Index CFDsTrading SymbolTrading Hours (Server Time)
Dow Jones Industrial AverageUS3001:00 - 24:00
CAC 40 FRA4010:00 - 24:00
German stock index DAX 30GER3001:00 - 24:00 (Friday Close 23:00)
FTSE 100UK10001:00 - 24:00 (Friday Close 23:00)
Euro Stoxx 50 FutureEUSTX5001:00 - 24:00 (Friday Close 23:00)
NASDAQ 100NDX10001:50 - 24:00
S&P/ASX 200ASX20001:50 - 24:00
Nikkei 225JPN22502:30 - 24:00
Hang Seng (HSI)HK5001:00 - 24:00 (Friday Close 23:00)
Standard & Poor's 500SPX50001:00 - 24:00

Stock Indices in Financial Markets

On any given day, some stock prices rise, while others fall. Stock index moves reflect the average stock price move (weighted by market cap). Indexes can therefore be less volatile than individual shares, and can be more predictable.

Indexes have been around for over 100 years, but index trading only gained popularity in the 1970s when futures contracts were introduced for the S&P500 index. The S&P remains the most popular index amongst traders, followed by the Dow, the FTSE 100, and the Nikkei.

Trading Indices using Contracts for Difference

EightCap’s clients can trade 8 of the most popular indices in the world, allowing them to profit from activity in equity markets around the world. With equity markets on 4 continents represented, traders can trade nearly 24 hours a day, 5 days a week.

AUS200

The AUS200 is the headline index for the Australian stock market, and the most popular index amongst those trading during the Australian trading day.

UK100

The UK100, commonly known as the FTSE100, or Footsie, is the headline index for the UK market,
and the most popular index in Europe.

FRA40

The FRA40, or CAC, represents the largest 40 stocks on the Paris stock market.

GER30

The GER30, commonly referred to as the DAX, is Germany’s headline index and is weighted heavily to industrial and tech companies.

EUSTX50

The EUSTX50, or Eurostox index, represents the 50 largest companies in Europe.

US30

The US30, or Dow Jones Industrial Average, or Dow, is the oldest index in the world, representing 30 blue chip companies listed on the New York Stock Exchange.

SPX500

The SPX500 or S&P 500 index is the most heavily traded index in the world. It represents the 500 largest companies in the largest economy in the world.

JPN225

The JPN225, or Nikkei, is the headline index in Tokyo, Japan, and is heavily weighted to industrial conglomerates.

Comparing Index Trading

There are several instruments you can use to trade stock indexes, including futures, options, ETFs and CFDs. Futures and options require a trading account with a broker for each exchange, and typically have high contract sizes.

ETFs (exchange traded funds) are ideal for long term investors. ETFs are themselves shares which own all the shares in an index. They are therefore a cost-effective method of owning all the index fund shares without buying each individual stock.

For active traders and traders with smaller accounts, CFDs can be the most cost effective and easy to trade. Traders can access multiple markets with one trading account, and unlike ETFs, CFDs offer leverage and the option of going short.

Pros and Cons of Index CFDs

Advantages of trading Index CFDs

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Access multiple indices with one trading account.

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Trade market action from around the world.

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Go long and short, and use leverage with small or large amounts of capital.

Disadvantages of trading Index CFDs

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Using leverage irresponsibly can lead to large losses.

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Index trading is competitive and requires time and commitment to become proficient.

Join EightCap today to start trading Forex

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Risk Warning: Margin trading involves a high level of risk, and may not be suitable for all investors. You should carefully consider your objectives, financial situation, needs and level of experience before entering into any margined transactions with EightCap, and seek independent advice if necessary. Forex and CFDs are highly leveraged products which mean both gains and losses are magnified. You should only trade in these products if you fully understand the risks involved and can afford losses without adversely affecting your lifestyle (including the risk of losing substantially more than your initial investment). A Product Disclosure Statement (PDS) and a Financial Services Guide (FSG) for our products are available to download from our Legal Documentation page. You must assess and consider them carefully before making any decision about using our products or services.

EightCap is a registered business name of EightCap Pty Ltd (ABN 73 139 495 944). We are regulated by the Australian Securities & Investments Commission (ASIC) - our AFSL number is 391441. This licence authorises us to provide financial services to people in Australia.

The information on this website is of a general nature only and is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. EightCap is not a financial adviser, and does not issue advice, recommendations, or opinion in relation to acquiring, holding or disposing of a margined transaction. We provide general advice only and accordingly you should consider how appropriate the advice (if any) is to your objectives, financial situation and needs before acting on the advice.