Index CFDs generally refer to Contracts for Difference on stock indices, reflecting the price changes of these indices and incurring profit or loss due to fluctuations. Compared to individual stock investments, stock indices represent the trends of a group of representative stocks, serving as a barometer for a specific industry or even the overall economy of a country. For example, the Germany DAX 30 index consists of 30 representative blue-chip stocks, reflecting the overall performance of the German stock market. Through index CFDs, complex assessments of individual stocks can be simplified, allowing traders to analyse overall market sentiment, diversify risks, and avoid the extreme price fluctuations associated with individual stocks.
Index CFDs allow traders to speculate on global stock indices. EBC offers access to major global indices, including the Dow Jones, DAX 30, STOXX 50, S&P 500, Nikkei 225, and more. With just one EBC account, traders can gain exposure to multiple markets worldwide and capitalise on EBC's competitive spreads and flexible leverage.
EBC provides up to 100x leverage for index CFDs trading, which is the maximum leverage ratio allowed within compliance and regulatory standards. This takes safety and capital efficiency into consideration.
Different indices correspond to different contract sizes.
EBC offers CFDs on major global stock indices, with contract sizes of 10 for 100GBP (UK FTSE 100), 200AUD (Australia S&P/ASX 200), CNIUSD (China A50 Index), D30EUR (Germany DAX 30), E50EUR (Europe STOXX 50), F40EUR (France CAC 40), HSIUSD (Hong Kong 50 Index), NASUSD (US Nasdaq 100 Index), and U30USD (US Stock 30 Index). For 225JPY (Nikkei 225 Index) and SPXUSD (S&P 500 Index), the contract size is 100.
The minimum contract size for index CFDs is 0.1 lot.
Increased capital efficiency: Index trading usually involves lower leverage, but index CFDs allow for participation with less capital. However, it's crucial to manage your position when engaging in leveraged trading.
Bi-directional trading: A stock index reflects the overall direction of a stock market. Through index CFDs, traders can engage in both long and short trades, providing greater profit potential.
Risk diversification: Stock indices are often composed of a selection of the most representative stocks in a market. The movement of a single stock may not directly impact the index, effectively diversifying market risk.
As index CFDs reflect the trends of a group of stocks, focus should be given to the overall market rather than specific components. Generally, stock indices are directly correlated with central bank monetary policies and a country's economic situation. For example, if a central bank implements a contractionary monetary policy, concerns about a lack of liquidity may suppress the stock market. Similarly, poor economic data can lower market investment expectations, impacting the stock market.
World's Best* Broker, empowering your journey to success.
World's Best* Broker, empowering your journey to success.
