What Are Indices

The indice, or stock index, is a good indicative measure of market performance. A change in the performance of any constituent stock in an index is reflected in a change in the overall value of that index.

Compared with stocks, index trading does not require clients to invest in lots of funds to trade freely, and clients can trade in both directions and enjoy all the benefits and risks brought by market volatility.

HBL can provide customers with seven influential indices in the world including Hang Seng Index, Dow Jones Index, S&P Index, Nasdaq Index, UK FTSE 100 Index, German DAX30 Index and French CAC 40 Index.

Index

Why choose to trade indices?

Stock indices give you a chance to trade an opinion of an economy without having to pick individual stocks. With unique benefits to both CFD trading and spread betting, indices are some of the most popular products to trade.

  • Quick execution, no repeat quotation

  • Competitive spread

  • Risk hedging through short position

  • No stamp duty, low cost

  • Multiple trading methods, flexible leverage

  • Earn dividends

Index Trading

Market Index:

Index Trading

A Collection of Stocks

Historically, investors needed a way to analyse the overall performance of the market. After all, you could never make a statement on the US economy by only looking at, say, Apple Inc.’s stock. Due to this need the stock indices emerged representing the weighted average value of selected top-performing stocks and aiming to provide a quick glance at the market as a whole.

An index is a good way to look at particular markets, but for investors, it offers a way to gauge the performance of their individual portfolios, so underperforming specific investments can be adjusted to be more in line with the general trend of the market.

Indices can have a variety of variables. For starters, the number of stocks in any particular index can vary wildly, from a few dozen companies to thousands. The price of an index is found through weighing. Price-weighted indices are averaged based on the price of each component stock. Capitalization-weighted indices adjust the calculation based on the size of the companies included. Many other factors are represented depending on the stock index in question.

These days, there are hundreds of stock indices globally, representing companies nationally, regionally, globally, and even by industry.

Stock Index CFD

Trading on Margin

Investing in stocks has a wide appeal globally, but the barrier to entry can often be high. Say you want to invest in an economy through an index to attempt to mirror the performance of that economy. You could simply buy shares in all the stocks on the index, but that could get costly, especially in light of broker’s fees for transactions. Some turn to the futures market, trading the index through an ETF. The ETF is a fund that has shares in all the stocks in the index. With ETFs, you generally have 100% margin, meaning you have to put up the full value of the index to participate.

HBLs index products, however, are traded as contracts for difference (CFDs). With CFDs, you can place trades on margin. You put up a fraction of the capital and still get the full value of the trade. But that’s not all.

Trading indices as CFDs removes the barrier to trading. When you trade on the futures market, you have settlement periods. Short selling is typically impossible without a significant account balance. Plus the fees for each transaction are significant.

Index CFDs, on the other hand, have no settlement periods, short selling is available, and you only pay the spread. With CFDs, you can scalp the market much more easily, decrease your risk exposure and be able to enter the market with lower capital requirements in your account.


We would like to highlight that trading on margin doesn’t come without risks, as retail clients could sustain a total loss of deposited funds, where Professional clients could sustain losses in excess of their invested capital.
Before starting to trade, you should always ensure that you fully understand the risks involved.

How an Index CFD Trade Works

Index Trading

Unlike forex, when you trade an index, you simply buy or sell based on your opinion of how that index will perform. With FXCM, you pay only the spread to open a trade. We do not impose stop restrictions for most of our products—you can scalp major indices. Plus, our smaller contract sizes mean you can minimise your exposure in the market

TRADE YOUR OPINION OF GLOBAL STOCK MARKETS

Want an ideal environment to trade US, European, Asian and Australian stock markets? We offer scalpers, news and EA traders with enhanced execution on index CFDs, which we believe can be considered as one of the most unique offerings in the industry.

Trading Data

The HBL allows customers’ orders to enter the international foreign exchange market instantly, enjoy top-level market liquidity and reasonable spreads, flexible leverage, and low transaction costs, without paying settlement fees, and earning profits through



HBL hereby kindly reminds you to consider the risk of increasing leverage. Relatively small fluctuations in the market may be scaled up and have a large impact on the funds you have deposited or will deposit, which may be detrimental to you and may be beneficial to you. You may lose all of your original margin and you will need to deposit additional funds to cover your position.