Indices are fantastic tools that represent the collective performance of a group of companies within a specific sector, region, or market, offering broader, more diverse exposure. These benchmarks provide insights into the overall health and trends of various segments of the economy.
Contract for Difference (CFD) trading allows you to speculate on the price changes of Indices without the need to own the underlying assets. This approach offers a flexible avenue to capitalise on both rising and falling Indices prices.
Engaging in CFD trading for Indices offers a host of advantages. Leverage is a primary feature, empowering traders to control larger positions with only a fraction of the total capital required. While this magnifies potential returns, it's essential to bear in mind that losses may also be increased.
CFD trading gives you the flexibility to go long (buy) or short (sell) on Indices, allowing you to capitalise on upward and downward price fluctuations alike. This adaptability proves invaluable in the exciting landscape of Indices trading.
When you trade Indices, you own the asset itself. Trading Indices CFDs, on the other hand, allows you to speculate on price movements without ever owning the asset. A key advantage of CFDs is that you can enter contracts for prices falling (going short), as well as rising (going long).
All trading comes with risk and CFD trading is no different. We strongly encourage you to take your time, do your research, and practice good risk management. The Alpari Academy is a good place to start learning about trading with CFDs and we have excellent analysis tools that can help you balance risk with reward.
Leverage is like a loan of sorts, based on ratios. For example, if the leverage offered is 1:100, then for every $1 you put down as capital on your trade, we'll 'lend’ you $100. This means that you have access to larger trade sizes without the capital outlay. Leverage is high risk, and you should be aware that while it can boost any potential profits exponentially, it can also increase losses. Please don’t enter a CFD trade without understanding the potential financial risk.
Indices CFDs are available on all Alpari trading accounts, but contract specifications in terms of spreads, lot sizes, swap values and leverage may differ from account to account, and instrument to instrument. Typically, the higher-tiered accounts require larger deposits, but offer more favourable conditions.