Choose from the world’s most active indices which feature today’s most interesting and exciting stocks including Activision Blizzard, Adobe, Amazon, Nike, Honda, Sony, Olympus, BMW, Adidas and Airbus to name just a few.
Over a Dozen Basket of Stocks to choose from
Each market has its own variables, opening hours and level of mobility. Choose the best market for you or trade on multiple markets. easyMarkets gives you access to trade globally.
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What is indices trading or stock index trading? Essentially you will be trading on what is called a “basket of stocks” or a combination of stocks. The great thing is that you don’t even have to own the stocks to be able to trade them. Some indices follow a certain category of stock – for example the Nasdaq is composed of non-financial companies – Apple, Amazon, Alphabet Class A (Google), Intel and more.
The world’s most popular indices are:
The reason they are popular is because many of these indices include (or are completely composed of) blue-chip stock. Blue-chip can be defined different ways but generally it’s a well-established company with a market cap in the billions (the value of its outstanding shares x the value of a single stock) considered a market leader. Example of blue-chip stock:
Why would you trade indices though compared to individual stocks? The most obvious benefit is diversity and most financial advisors recommend this as a risk management strategy. Volatility is averaged out amongst the various companies, whereas if you are invested in just one, your entire investment is exposed to the volatility of just one company’s stock. Another benefit, especially if you are investing in indices in different locations, is the ability to trade around the clock. This can be very helpful if you trade during certain hours, and another benefit is if something happens in one-time zone, it has the potential to effect the next market opening. Another reason is stock markets are usually positively correlated to the health of an economy. If a country’s economy is up, so is its stock market – there are instruments though that move inversely to the health of an economy. Safe haven currencies and precious metals usually move against the health of an economy, as investors flock to them to keep their assets safe during market volatility.
So how do you choose which index is best for you? Although we can’t give investing advice , one thing holds true no matter what you trade: knowledge is power. Choosing an extremely popular index such the S&P500 or the Nikkei means you will have a deep well of information available to you, because not only will you have the primarily source reporting on the performance of the index but most other major financial publications report on them also. Also many of the popular indices are generally composed of popular company stock, which are more likely to be regularly reported on.