An index groups are multiple companies that share prices together. An index is usually made up of share prices that are listed together on the same exchange. They are often mentioned in the news media to measure how a certain market or exchange is performing.
Investors trade indices for the same reasons as they trade shares, hoping to profit from their growth but with the additional advantage of the diversity they add to a portfolio. When you trade an index you are trading multiple companies across multiple industries. For example there are 30 companies that make up the German DAX index. Including, at the time of writing, the carmaker Volkswagen, the sporting goods company Adidas, the airline Deutsche Lufthansa, and the pharmaceutical company Bayer, and the insurance and financial company Allianz.
The companies in DAX are the 30 most valuable companies listed on the German Deutsche Boerse stock exchange. Trading the DAX gives an investor more diversity than investing in a single company, e.g. Adidas, which specialises exclusively in in manufacturing sporting goods.
Why trade Index CFDs with MFI Forex?
At the time of writing the price of the DAX is €9,682.0. Trading the full index price would cost €9,682.0.
To trade the DAX with MFI Forex you can trade from 0.10 lots, which is 0.10 of the price of the index, and you only need to deposit 1% of the price of the trade.
You will still get the diversity of trading the multiple companies in the index, and you can trade multiple indices across the UK, Europe, and the US.
You can also profit from falling markets by short selling the indices.
If you have never traded equities you can learn how to use our platform with a demo account while improving your trading knowledge on our Trading Skills page.
You can find the full list of the global indices you can trade with MFI Forex on the Market Watch on our MT4 terminal .To start trading indices commission free now open an STP account.