If one starts to read about the various instruments in the financial market, he would probably wonder when to stop? Yes, there are many instruments and tools in continuous interplay in the financial market. One such name is Index.
What is an Index?
Index or indices is a term used to refer to a group of stocks in the market. It is like a basket of stocks. An index is used to represent the value of a particular market. It tells about the performance of that particular market over a period of time. For example, the FTSE 100 index measures the performance of 100 major companies in the British territory. So if the share price of a company rises so does the index value and vice versa.
What is index trading?
Index trading is a type of CFD. In this, a trader trades in the fall and rise of a particular index. It is like making bets on the rise and fall but after doing careful tracking. There are many companies such as the Phillip CFD which allows world indices CFD for traders looking for financial investments. Since the money you are putting on is a group of companies, the chances of making losses are comparatively less.