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Indices & CFDs
What Are Indices and CFDs?
A stock market index measures the performance of a group of shares. For example, an index can track a basket of the largest companies in a country. When the index rises, the combined value of those shares has risen on average.
A CFD, or contract for difference, is an agreement to exchange the difference in the price of an asset between the time you open and close a trade. You do not own the underlying asset. You can take a position on prices rising or falling.
CFDs are leveraged products. You put up a fraction of the position value as margin, which magnifies both gains and losses. You can lose more than the margin you put up on a position, so check your account terms on how negative balances are handled.
Index prices can gap at the market open, and trading hours differ by index. Plan your trades around these hours and around major news events.
Before You Trade Indices
Prepare with these steps.
Know the Market
Learn what moves an index: company earnings, economic data and interest rates.
Learning centre
Managing Risk with CFDs
Leverage requires care. Keep these points in mind.
Control position size
Use a size that lets you stay in the trade if the price moves against you.
Use stop loss orders
A stop loss can limit a loss but is not guaranteed in fast or gapping markets.
Watch your margin
Monitor margin level on your platform, see monitoring and support.
Ready to get started?
Open a free demo account to practise first, or open a live account when you are ready. Trade on the web platform, MetaTrader 4 or MetaTrader 5.
Risk warning: Trading leveraged products such as forex and CFDs carries a high level of risk and may result in the loss of some or all of your capital. Only trade with money you can afford to lose. Read the full risk warning.