Indices Trading

Index trading offers a more risk averse approach to investing in stock markets. This is because individual equities are grouped together to comprise a single price that reflects the value and performance of an overall basket of stocks. Index trading is also used as a hedging tool against an individual or portfolio holding of equities, although how accurate the index hedge will be is dependent on the relationship between the index and the equity or basket of equities.

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What are indices?

It can be difficult to individually track every instrument trading in a country, so it’s easier to monitor an overall benchmark value like an index. Headline indices for a country generally reflect the largest market capitalised companies listed within the country. However, indices can also represent segments, such as technology or small cap shares.

Why start indices trading?

By allowing traders to take a broader view of a group of equities, indices reduce the risk that comes from trading individual company stocks or shares. When trading global equity indices, traders can diversify their portfolios geographically. This creates opportunities to profit from market movements around the globe. 

At a Glance: Trading Indices with ADSS

Instrument Spread from Margin from Trading Hours
  Retail Professional  
US30 1.5 5% 0.2% 22:00 - 20:15, 20:30 - 21:00
US500 0.7 5% 0.2% 22:00 - 20:15, 20:30 - 21:00
GERMAN30 1 5% 0.2% 06:01 - 20:00
UK100 1 5% 0.2% 00:01 - 20:00
JAPAN - 5% 1% 22:00 - 21:00
AUSTLN - 5% 1% 22:51 - 24:00 Sunday,
00:00 - 05:30, 06:11 - 20:00,
22:51 - 24:00 Monday to Friday
20:00 Fri close)
HSENG - 10% 1% 01:15 - 04:00, 05:00 - 08:15, 09:15 - 15:45
Market Info Sheet Market Info Sheet (Spread Betting)

HOW TO TRADE INDICES: TRADING EXAMPLES

If you are interested in trading stock indices via contracts for difference (CFDs) or spread betting, the following example will explain how to trade indices and how to calculate your trades:

If UK100 is trading at a selling price of 7,579 and a buying price of 7,580:

UK100: 7579/7580

If you expect the price of the UK100 to move up, you BUY one contract of UK100 (each contract = 10 per point).

Scenario A

You bought at 7,580, the price went up to 7600.00/7603.00 and you wish to take your profits. You sell your position by closing it at the selling price of 7,600.

Your total profit = (7600.00 - 7580.00) x 10 = £20 x 10 = £200

Scenario B

You bought at 7,580.00, the price went down to 7560.00/7563.00 and you wish to limit your losses. You sell your position by closing it at the selling price of 7,560.00.

Your total loss = (7560.00 - 7580.00) x 10 = -£20 x 10 = -£200

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