When it comes to our CFD Markets, indices refer to equity or stock indices. An equity index is a collection of stocks and are used to measure a cross section of the market. It is effectively an imaginary portfolio and each index can have its own calculation methodology and is usually expressed in terms of a change from a base value. By trading stock indices, you can take advantage of rising or falling markets in one simple trade.
Stock indices are generally 'weighted', meaning larger capitalised firms such as Royal Dutch Shell in the FTSE100 or IBM in the DJIA 30 have more of an influence on the index than lesser capitalised firms.
The CFDs we offer on indices replicate the price movement of the underlying in the market, so for example, our GERMAN30 index is our market on the DAX30 future. With SuperTradingOnline you can trade long or short, depending on whether your view is that the market is going to go up or down and you can hold a position from seconds to weeks or months if you so wish.
When you trade index CFDs online with STO you only need to deposit a fraction of the value of the trade as initial margin, currently 0.4%. So for example if you were to buy 1 lot of the GERMAN30 index, the value of the trade is the current value of the index X 5 (for 1 lot) X 0.4% or 7250 X 5 X 0.004 = €145. Please be aware, however, that CFDs are a leveraged product and it is possible to lose all your entire account balance, includng your initial deposit and any profit you may have made in previous trades.
Risk Warning: Forex and CFDs are leveraged products that incur a high level of risk and it is possible that losses exceed your investment. Please ensure that you understand the risks involved and seek independent advice if necessary. Please read carefully our Risk Warning