Stock Indices are groups of stocks that represent part of the financial market and track the performance of a group of stocks. For example, the S&P 500 follows the stocks of 500 large US companies. When people refer to 'market' performance in stock index trading, they often mean how major indices like the S&P 500 are doing. Traders can buy and sell instruments that track indices, speculating whether an index will rise or fall.
How stock indices work:
Indices are weighted to reflect the size and price of the stocks within it.
In the S&P 500, larger companies have more influence based on their total market value. This is called market capitalisation weighting.
In the FTSE 100, stocks are weighted purely by their share price. Expensive stocks carry more weight.
Instead of picking individual stocks, traders can use indices to invest in many stocks at once. Index performance reflects overall market trends.
There are also exchange-traded funds (ETFs) that mimic indices. ETFs provide a simple way to gain broad index exposure without buying all the stocks directly.
Tap into global Stock Indices
Trade on the overall movement of the stock markets with the world's top exchanges. Combine high leverage with advanced risk-management tools to keep your trades a step ahead.
Benefits of Trading Stock Indices With AddisFX
Here are some of the benefits of trading Stock Indices with AddisFX.
Swap-free trading, no overnight fees
Focus on market movements without worrying about overnight charges.
Smart, diversified portfolios
Access diverse asset groups and keep your exposure measured with...
Negative balance protection
Protect your account from unexpected market swings.
Spread your risk
Gain broader market exposure and spread risk across leading companies...
Zero commission trades
Maximise your potential returns without worrying about extra fees or...
Weekly Economic Calendar
Please refer to Economic Calendar before trading Forex
- Forex
- Derived Indices
- Stock Indices
- Cryptocurrencies
- Commodities
Stock Indices available on AddisFX
AddisFX has available different stock indices to make your trade smooth
North American indices range from Wall Street’s powerhouses to Silicon Valley’s tech titans.
- 40+ Forex pairs
- Deposit: USD, EUR, GBP, JPY
- Trading Central
European indices offer a diverse trading landscape, covering indices from London’s financial hubs to Berlin’s innovation centres.
- 40+ Forex pairs
- Deposit: USD, EUR, GBP, JPY
- Trading Central
A region on the rise, Asian indices represent the world’s fastest growing economies.
- 40+ Forex pairs
- Deposit: USD, EUR, GBP, JPY
- Trading Central
Browse our FAQ
You will find the most frequently asked questions here. if you can not find what you are looking for our support is there for you!
-
01
What are stock indices?
-
02
What are the costs of trading CFDs on stock indices?
When trading CFDs on Stock Indices, there are a few CFD trading fees to be aware of:
Spread: This is the difference between the buy and sell price quoted by the broker. It represents the transaction cost each time you open or close a trade.
Overnight financing: To keep a trade open overnight, a financing charge will be applied based on benchmark rates plus a markup (swap-free accounts do not have this charge). This compensates the broker for the cost of holding your position overnight.
Commissions: Some brokers charge commissions per trade, but Deriv offers commission-free CFD trading.
Currency conversion: When trading in foreign markets using a different base currency to your account, currency conversions may incur fees and forex risk between your account currency and the instrument's currency. -
03
What are the most popular indices available for trading?
The most popular indices to trade depends on where you are and which trading platform you use. However, some well-known examples include:
S&P 500 Index (USA)
DJIA Index (USA)
NASDAQ Composite (USA)
FTSE 100 (UK)
DAX 40 Index (Germany)
CAC 40 Index (France)
Nikkei 225 (Japan)
HSI Index (Hong Kong)
The S&P 500 Index is one of the most widely followed indices in the world. It represents the 500 largest US companies and is commonly used as a benchmark for the overall US stock market. -
04
What is the difference between price-weighted and market-cap weighted indices?
Indices combine the prices of a group of stocks into a single value representing the overall market or sector. There are two main ways for how indices are calculated:
Price-weighted indices simply average the share prices of all the companies included. So, each stock contributes equally to the index, regardless of the company's size. The Dow Jones Industrial Average is a famous price-weighted index.
Market-capitalisation-weighted indices (also called market-cap weighted) are calculated differently. Rather than treat each stock equally, they give more weight to larger companies based on their total market value. So, the share price of a huge company like Apple contributes more to the index value than a smaller company. The S&P 500 is a well-known market-cap weighted index — it tracks the 500 largest US companies, so bigger firms have more influence on the index.
The choice of the indices calculation method can significantly impact how an index performs. But both price-weighted and market-cap-weighted indices are widely followed by traders and investors looking to understand market movements. S&P 500 Index (USA) DJIA Index (USA) NASDAQ Composite (USA) FTSE 100 (UK) DAX 40 Index (Germany) CAC 40 Index (France) Nikkei 225 (Japan) HSI Index (Hong Kong) The S&P 500 Index is one of the most widely followed indices in the world. It represents the 500 largest US companies and is commonly used as a benchmark for the overall US stock market.
How to trade Stock Indices on Deriv
CFDs
Speculate on the price movements of popular Stock Indices with high leverage and advanced technical indicators.
Platforms
Deriv MT5
Deriv cTrader
Deriv X
Options
Predict the market trends of Stock Indices without the risk of losing your initial stake.
Platforms
Deriv Trader
Deriv Bot
Deriv Go