Trading is increasing in popularity and more people are showing interest in the stock, forex, and commodities markets. A growing number are keen to invest in foreign markets and indices. This is large because this form of trading offers an interesting opportunity to trade on a group of assets rather than just individual ones.
A stock index, otherwise known as an index, measures a certain market or a section of it based on the combined value of the companies included in it. It also allows the tracking of a group of assets so traders can measure their performance. Stocks or assets can be grouped according to location, sector, type, industry, or another kind of factor. For example, there are indices for technology, commodities, and for certain countries. They are often used to assess how a certain economy or sector is performing when compared with other economic indicators or indices from other regions.
Indices can be traded in the same way as a singular asset such as a stock, commodity, or currency. The trader chooses the indices they wish to speculate on and opens a trade on a certain position. However, other ways of trading indices have become more popular, such as CFDs and binary options. With CFDs, the trader speculates how much the value of the index will change over a certain period of time. In the case of binary options, the trader picks an outcome, and they either will or will not make a profit. As faster-paced options, both of these forms of trading are commonly used with indices and are particularly popular for traders looking for short-term trading options.
There are a large number of indices across the world, all catering to different markets and preferences, while some are more important than others. Below, we run through some of the main ones.
The Wall Street 30 is an index that tracks the individual and combined performance of 30 of the USA’s biggest and most profitable public companies. It’s one of the oldest in the country and includes companies like American Express, Caterpillar, IBM, Dow, Walgreens Boots Alliance, and 3M.
As the name suggests, the US 500, otherwise known as the Standard & Poor’s 500 Index, is a group of 500 large US companies. It’s categorized as a market-capitalization-weighted index which refers to the fact that capitalizations change depending on how many shares are publicly traded or are available for public trading. Big names include Apple, Amazon, Facebook, Johnson & Johnson, and Microsoft.
Created by FTSE, the China A50 Index includes companies from the Shanghai Stock Exchange and the Shenzhen Stock Exchange. It features some of the largest and most valuable Chinese companies such as banks, railways, communications companies, and insurers.
The Nikkei 225 is an index of companies from the Tokyo Stock Exchange. In existence since 1950, it includes 225 publicly traded companies from a range of different sectors. Companies include Japan Tobacco, Nippon Paper Group, Fujifilm Holdings, Shiseido Co, and Mitsubishi Mining.
So, there you have it. An introduction to some major indices and how to go about trading on them. If you are interested in trading these indices, it's important to stay up to date with information relating to those sectors and economies that the indices represent. For example, tech-heavy indices in the US require in-depth knowledge about both the US and the tech sector. Remember, there are no guarantees in trading so be sure to research thoroughly.
Top 6 assignments business students usually complete
Are you already a proud business school student or still hesitating whether it’s worthwhile to get an MBA degree? Either way, you’ve probably heard a lot about how rigorous MBA training usually is.
Benefits of technological decentralization in businesses
Benefits of technological decentralization in businesses
The Biggest Wins in Poker History
Outside of organised sport, poker is one of the most popular pastimes on the planet by players from Las Vegas to Laos and everywhere in between. One of the many reasons for poker’s popularity is the riches that the game can offer to those successful enough to consistently win the top prizes.
Drive more traffic for your currency exchange website to increase growth
The currency exchange market is constantly evolving so in order to have an edge over your competitors, you must be up-to-date with the latest trends and development in your industry.
The gambling scene in Washington — what is its future?
Things are looking up for fans of gambling in the United States of America. Many more states are warming to the idea of legalising sports, after US federal laws changed in 2018.
Top 5 publicly traded gun company stocks
For just a long time, the market for gun company stocks has indeed been completely ignored. Even so, even as the whole world becomes increasingly chaotic, firearms are mainly motivated by the demand for self-protection. This has resulted in an unprecedented rise in weapons sales throughout the US.
How to exchange ETH to BTC
Cryptocurrency exchangers are very popular with users of digital money networks. This is due to the fact that not everywhere you can pay with bitcoin, ether or other crypto-coins, however, you can buy any product or service with them, having previously exchanged for fiat (traditional money).
How to help your business make more money with technology
With technology constantly evolving, there is an increased demand for innovation and technology. This has led to a spike in eCommerce, which means more sales for businesses! Unfortunately, doing things the same way they have been done is not always the best course of action when it comes to marketing.
The industries utilising e-wallet payment methods
An increasing amount of consumer transactions are taking place over the internet, last year over 779 billion digital payments took place across the world. This figure is expected to grow by around 13 percent each year and more people enjoy the convenience and accessibility of spending money online.
Is online bingo legal in Washington state?
Online bingo is growing rapidly, with players everywhere noting the benefits of gaming from the comfort of home. Exciting, engaging, and best of all, offering a real chance to scoop the jackpot, bingo is enjoyed by millions worldwide.
6 Ways to increase the value of your home before selling it
When you are looking to sell your home, you want to make sure you sell it for a good price. Luckily, house prices normally go up over time, so you should not have any trouble selling it for more than you bought it for.