Help CenterIndices are a collection of stocks and instruments used to track the growth or trajectory of an industry or sector. These whole-sector tools allow us to look at how a chunk of the market is performing to better understand investment opportunities along with market fluctuations.
The S&P 500 (USA), DAX 30 (Germany) and FTSE 100 (UK) are a collective of each country’s largest companies based on their market capitalization. As an index tracks a basket of publicly traded stocks, by following the index, traders can understand the broad movements of the market and plan out their investment strategy accordingly.
The most popular way to trade indices is via CFDs, also known as Contracts for Difference. These financial instruments allow traders to profit both from rising and falling prices, by opening long (buy) positions, if you think an index will rise or short (sell) positions if you think the index will fall.