Choose from the world’s most active indices which feature interesting and exciting stocks. Indices are a popular instrument because they are generally considered to average out volatility because they quote the price of multiple stocks.

Over a dozen different Indices to trade.


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First time trading indices?

What is indices trading or stock index trading? Essentially you will be trading on what is called a “basket of stocks” or a combination of stocks. The great thing is that you don’t even have to own the stocks to be able to trade them. Some indices follow a certain category of stock – for example the Nasdaq is composed of non-financial companies – Apple, Amazon, Alphabet Class A (Google), Intel and more.

Why would you trade indices though compared to individual stocks?

The most obvious benefit is diversity and most financial advisors recommend this as a risk management strategy. Volatility is averaged out amongst the various companies, whereas if you are invested in just one, your entire investment is exposed to the volatility of just one company’s stock.

Another benefit, especially if you are investing in indices in different locations, is the ability to trade around the clock. This can be very helpful if you trade during certain hours, and another benefit is if something happens in one-time zone, it has the potential to effect the next market opening.

Another reason is stock markets are usually positively correlated to the health of an economy. If a country’s economy is up, so is its stock market – there are instruments though that move inversely to the health of an economy.

Safe haven currencies and precious metals usually move against the health of an economy, as investors flock to them to keep their assets safe during market volatility.

So how do you choose which index is best for you?

Although we can’t give investing advice , one thing holds true no matter what you trade: knowledge is power. Choosing an extremely popular index such the S&P500 or the Nikkei means you will have a deep well of information available to you, because not only will you have the primarily source reporting on the performance of the index but most other major financial publications report on them also.

Also many of the popular indices are generally composed of popular company stock, which are more likely to be regularly reported on.

The world’s most popular indices are:

Dow Jones Industrial Average - One of the oldest and best-known stock market indexes in the world, the DJIA tracks the price of 30 large, publicly traded US companies. Also known as the US30.

S&P 500 - A basket of the 500 largest US stocks, representing around 80% of total US market capitalisation. The S&P500 is therefore seen as a good indicator of how the US economy is performing.

DAX 30 - Tracks 30 major German companies trading on the Frankfurt Stock Exchange. The DAX 30 index, or Germany 30, is considered a barometer of the German economy.

Nikkei 225 - Japan’s premier stock market index, the Nikkei consists of 225 top-rated companies from the Tokyo Stock Exchange, including prominent Japanese brands such as Toyota and Panasonic.

FTSE 100 - Tracks the top 100 stocks trading on the London Stock Exchange. Although UK-based, many FTSE 100 companies are globally focused and earn revenue outside the UK, therefore it does not closely follow the UK economy.

ASX 200 - Australia’s primary benchmark index, tracking the top 200 stocks on the Australian Securities Exchange. Financials and materials are the biggest sectors in the ASX 200, and can therefore affect its performance.

The reason they are popular is because many of these indices include (or are completely composed of) blue-chip stock. Blue-chip can be defined different ways but generally it’s a well-established company with a market cap in the billions (the value of its outstanding shares x the value of a single stock) considered a market leader.

Hang Seng - Tracks the performance of the 50 largest companies by market capitalisation on the Hong Kong stock market. The Hang Seng is also linked to the Chinese economy, and the wider Asian market.

EURO STOXX 50 - Includes the 50 largest blue-chip companies in the Eurozone. The EURO STOXX 50 is viewed by investors as a health indicator for the European economy.