Indices

An indices is a "composite" measure of the performance of a particular market or sector of the economy. The indices value represents the total value of all stocks that are included in it and is calculated as a weighted average.

Indices allow you to make trades not just on the shares of an individual company, but to join the rise or fall of an entire industry (IT, engineering, etc.).

The major stock indices (stock indices of countries around the world) include, among others, the following: S&P 500, Dow Jones, Nasdaq, FTSE100, Nikkei225, DAX, CAC40, Euro Stoxx 50, ASX200

Most often stock indices represent a number characterizing the state of the stock market as a whole - the market where the shares of the companies included in the index are represented. Most often indices are composed of shares of the largest (in terms of capitalization) companies.

Advantages of indices trading

Indices are used to track the performance of a basket of securities. For example, if you trade the indices of a stock index that consists of several stocks, you are essentially opening positions in several stocks at once. This is at once a more economical and less stressful way to diversify your investment portfolio across different sectors and trade a basket of stocks. For this reason, when you trade indices, there is no need to analyze each company because the index is made up of several companies.