INDEX CFDS

Index CFDs are a financial instrument that allow traders to speculate on the price movements of the world’s major stock indices. For example, if a trader believes the price of the NASDAQ will increase in the future, they can buy a NASDAQ Index CFD – and then sell it if the price increases to a desired level. On the other hand, if a trader believes the price of the NASDAQ will decrease in the future, they can sell the NASDAQ Index CFD.

Index CFDs allow traders to profit from both price increases and decreases, without owning any underlying asset. With Index CFDs, traders can also utilise leverage. This is a tool traders use to amplify their position size and potential profit (it also amplifies potential losses).

This depends on the performance of a particular Index CFD. Share indexes are a basket of stocks that simply fall within a category. For example, the NASDAQ is made of many U.S. technology companies. In times of prosperity for the technology industry, traders should expect the NASDAQ to increase in price and vice versa. The role of a trader is to analyse the different factors which can impact the price of stocks (and thereby indexes) and make a determination on how the future price of an Index CFD will move.