Gloabl Stock Indices CFD is a form of Contracts For Difference (CFD) that allows investors to track and trade the underlying index, although prices may differ from the actual index levels. Index CFDs are intended to mirror the best estimate of the present cash price of the market and so the quotes are taken from the corresponding futures contract with a fair value adjustment. The adjustment is needed because while the financing fee for the open-ended CFD is charged separately each night, but the futures price reflects the remaining cost of funding to the contract expiry date.
What is Global Indices Trading?
How do you Trade Global Indices?
The value of an index is usually described in terms of a number of points. Each index is calculated in a slightly different way, but its value generally represents a weighted average of the current values of its component stocks. This means that the changing value of an index from one day to the next reflects the fluctuating values of the individual stocks that it is made up of, and is why an index can be a good representation of the state of a country’s economy or of a specific industry.
To trade indices, traders can go long on a particular index if they believe that stocks in that market are likely to increase overall in the future, or go short on an index if they predict that the index is likely to drop in value.