- Work online without requotes
- Impressive liquidity
- Ability to choose a game for a fall / increase, taking into account the market situation
- A great tool to help diversify forex trading
Working with stock indices
You have a very attractive tool for trading in financial markets. Moreover, many experts call stock indexes the best way to diversify risks.
Stock Index strong> & nbsp; - is an indicator of the current state, as well as the dynamics of the securities market. It is determined on the basis of the quotes of the most liquid stocks. Indices of specific countries reflect the level of the most developed sectors of the economy and act as indicators of the general economic condition of the country.
Stock Trading Features
The movements of the index make it possible not only to perform a general analysis of the state and direction of the market, but also to get a good profit on trends. Trading directly by the index itself is not possible. Transactions using the instrument in question are carried out through standardized futures. By acquiring or selling futures for a specific index, the parties to the transaction put on a change in the key indicator. Those. the investor conditionally buys or sells a package of shares of corporations that form the selected index.
Trading in the instruments in question can be done through contracts of the same name for differences, the value of which is set by the indices of the corresponding indices or futures. The main advantages of such trading are the ability to work with fractional lots, as well as use leverage.
The calculation of the indices is based on the average values of the shares that belong to a particular market segment. It should be noted that stock indices can be compiled from corporate shares of individual areas of the stock market (for example, NASDAQ) or from shares of the largest corporations in the country (for example, the British FTSE100).
Stock indices show the general direction of movement of a specific market segment or national economy of a particular state. But we must remember that indices are formed on the basis of a set of shares of established corporations. Therefore, they change under the influence of falling or growth of stock prices of individual corporations.
When calculating the values of the indices, various methods are used. The two most popular calculation methods are:
- 1. calculation based on the value of shares of companies that are included in the index (for example, the Japanese index
- 2. calculation based on the capitalization of the corporation whose shares form the index (for example, German DAX ).