Indices are among the most traded CFD instruments since there is no physical asset being exchanged. Instead of buying an index outright, traders use derivatives like CFDs, futures, ETFs, or spread bets to speculate on price movements. These instruments let investors profit from index fluctuations without holding individual assets. While indices can represent different asset classes, stock and commodity indices remain the most well-known, each with its own valuation methodology.
Benefits of trading indices
Trading indices provides broad market exposure rather than focusing on a single stock. By trading an entire index, you invest in the most actively traded companies, reducing the impact of individual stock risk. This approach enables you to capture opportunities across entire sectors or markets. With indices, you can profit from both upward and downward movements, expanding your trading potential and flexibility.
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