Indices traders speculate on price movements in stock Indices like the FTSE 100, the Dow Jones and DAX.
These well-known Indices are essentially baskets of individual Shares which are often ranked by independent institutions like major banks or specialist companies like Standard & Poor’s, the FTSE Group and Deutsche Börse.
Some of the biggest Indices markets in the world have long, distinguished histories.
Indices price movements and volatility are impacted by factors like political events, major factors which affect companies in a particular sector, economic data like employment figures and big changes in the currencies markets.
It is worth bearing in mind too that major shifts in the fortune of a single big company which is part of a wider index can disproportionately impact on its performance.
Global Indices markets are dominated by what are sometimes referred to as “benchmark Indices,” these are the stock Indices which have an outsize impact on economies and are generally held as reliable indicators of the economic health of a particular country or area.
Some of the most heavily traded live Indices markets include:
- The FTSE 100 – Sometimes called the ‘UK 100,’ this represents the UK’s hundred biggest companies by market capital
- Dow Jones – Often referred to as simply ‘Wall Street’ this comprises 30 of the US’ biggest publicly owned companies
- The DAX – Referred to as the ‘Germany 40,’ this index is made up of 40 major German companies
- NASDAQ 100 –The ‘US Tech 100,’ is a capitalization-weighted index made up of over 100 tech companies in the US
- Nikkei 225 – Japan’s biggest price-weighted index is comprised of 225 of the country’s biggest companies
- CAC 40 – Simply referred to as the France 40 this comprises 40 of France’s biggest companies by capitalization
For a full list of our current Indices prices and spreads, as well as available market hours, see our comprehensive trading costs page.
Which Indices can I trade at ETX?
You can trade all of our listed Indices using either a Spread Betting or CFD trading account. Below are three of our more popular Indices markets.
The UK 100 is one of our most popular Indices markets and has been in operation since 1984. Managed by the FTSE Group, a subsidiary of the London Stock Exchange, the UK 100 index includes stocks from some of the country’s best loved companies.
Household names comprising the UK 100 include companies from a wide range of sectors like Barclays, Burberry, Experian, Glencore, HSBC, Just Eat, Royal Mail, Tesco and Vodafone Group.
Because the UK 100 is made up of such a diverse range of companies across a variety of sectors it is less sensitive to factors which could impact individual stocks more disproportionately.
For example, a big economic data release or a sudden change in the value of the pound could adversely immediately affect the prices of companies in sectors like banking, while the same news may not impact companies like exporting.
Wild fluctuations and sharp volatility are therefore less likely when trading Indices like the UK 100 than when trading individual Shares.
Wall Street is the colloquial name given to the Dow Jones Industrial Average Index, which was launched in 1885. Now run by Standard & Poor’s and Dow Jones, the Wall Street index remains incredibly popular with investors for its wealth of trading opportunities.
Some of the iconic brands and companies comprising the Wall Street index include; Apple, Boeing, Caterpillar, Coca-Cola, Intel, McDonald’s, Microsoft, Nike, Visa and Walt Disney.
Like the UK 100, the sheer diversity of sectors represented in the Wall Street index means that the index is less sensitive to extreme volatility that might otherwise affect price movements of a single share.
The NASDAQ index is the third major US stock index and was originally launched in 1971. It, is comprised of 100 major companies across a wide variety of sectors with a focus on tech.
The NASDAQ index includes big names like Apple, Tesla, Cisco, Seagate, Intel, Adobe, Activision Blizzard, NVIDIA, Netflix and more.
While the NASDAQ is primarily dominated by the tech sector, it also boasts companies from industries like aviation, consumer services and healthcare.
The Germany 40 is a popular European index with investors due to the historically strong performance of companies on the Frankfurt Stock Exchange.
Founded in 1988, the Germany 40 is ordered by market capitalisation and is managed by Deutsche Börse.
Companies which make up the Germany 40 index include some of Germany’s biggest companies and brands which have global significance like Adidas, Allianz, BMW, Daimler, Deutsche Bank, Lufthansa, E.ON, SAP, Siemens and Volkswagen Group.
As with other major global Indices it is easy to see the diversity in the different stocks which make up the Germany 40, which is good news for investors looking for medium to longer term trading opportunities with less risk of extreme volatility.
Is Indices trading for me?
Trading global Indices with ETX allows you to go both long and short on price movements in major Indices from the UK, US, Asia, Australasia and Europe.
You’ll also benefit from market movement across not just a single sector, but a wide variety of different types of companies, providing greater opportunity as well as potentially lowering the risk of exposure to extreme volatility.
Read the next section of this guide to trading Indices to learn more about how to trade the different types of stock Indices we’ve covered here.