What are Indices?
A financial index is composed of public companies traded on a particular stock exchange or drawn from a particular field. The index calculates the collective market performance of all its component companies and publishes the figures. Indices are seen as accurate barometers of market sentiment as well as the strength of an economy. It is possible to open trades on the market performance of several indices, investing in the points change in their values.
There are many prominent indices, as well as less familiar ones from emerging markets available at Beneffx.com. Some of the biggest indices include the FTSE 100, S&P 500, NASDAQ-100 and DAX. When traded, indices generally perform in a similar way to stocks.
The Basic Principles of Indices Trading
Indices trading is like any other form of transaction. The goal is to buy Indices at a low price and sell them at a high price.
You buy 10 x DAX 30 units at $12,162.47 per unit (using our leverage). After one week you sell your DAX 30 units and earn a profit of $230.7.
How is that possible?
A week after you opened your position, DAX 30 was quoted at $12,185.54 (Bid price) to 12,187.99 (Ask price). You bought 10 units and paid $121,624.7.
You sold the 10 stocks and got $121,855.4.
You earned $230.7.
Enjoy Low Cost Investing in Major Global Indices
Beneffx.com offers all traders low-cost commission-free investing. There are no hidden fees or service charges. Instead, we offer highly competitive fixed spreads on the world’s major indices. The investment process is completely transparent and allows hands-on account management.
Diversify your Trading Portfolio With Indices
Indices generally perform in a similar way to stocks but are (arguably) less vulnerable to sudden declines than individual companies. When you trade indices at Beneffx.com you don’t actually buy the index. You are investing in its future performance and aiming to profit from changes to its points value.
Advantages of Trading Indices at Beneffx.com
Online trading has made it possible for traders to invest in the performance of indices and they are becoming a very popular form of investment. The value of indices closely reflects wider market trends, making them handy for new traders. The Beneffx.com Daily Report keeps you up to date with the performance of major indices, and our live charts allow you to analyse their performance, both in real time and as past data.
- Leverage enables you to gain a large exposure to any financial market with only a small amount of your capital. By doing so, you are able to increase your overall profits only because they are based on the total investment amount of the position.
- Spreading your investments across different asset classes creates a well-diversified portfolio, lowers the volatility of the market with direct relation to your trades and reduces your overall risk exposure.
- Risk management
- Exercising good money management is always possible thanks to the stop loss/take profit parameters. By automatically closing any open position in case the price either drops or rises beyond a predetermined point, you can continuously maintain your risk levels conservative.
- Profit opportunities
- It is possible to profit from online trading in both rising and falling markets. You can either open a SELL position and profit as the asset price drops or open a BUY position and profit as the asset price rises.
Who Can Trade Indices?
Online Indices trading is already a highly popular form of investment with millions of traders worldwide. Almost anybody can trade Indices if they are willing to apply the basic principles of risk management. The Beneffx.com online Education Center contains all the learning tools and educational resources that you need to begin online Indices trading.
Many of Beneffx.com top investors signed up as absolute beginners with no experience of the financial markets. They used the Education Center and free Demo Account to master the basics of Indices trading. Indices traders range from novice investors who trade part-time, to expert investors who manage complex personal portfolios on a full-time basis. The Beneffx.com platform gives you the freedom to set your own financial goals and manage your own investments.