Indices

Stock market indices are baskets of stocks of countries and show the status of the relevant stock market and the financial status of the country. By trading on stock market indices, you would invest briefly in the economy of the country concerned.

BalanceFX provides CFD service with competitive spread rates and a rapid trading platform in 11 index contracts, including Dow Jones 30, Frankfurt Dax, Japan Nikkei 225, and SP500 Index.

Before describing the CFD, it should be considered the concept of a derivative product. Financial products developed by indexing spot market products are called derivatives. Financial products from which derivative products are derived are called underlying assets. Therefore, the performance of derivative products is directly related to the performance of the underlying asset.

CFD is briefly called difference contracts. It works with a rationale on the price difference between the market maker and taker. The seller undertakes to pay the price difference of the underlying asset at the end of a certain maturity and at the time of the contract. However, the difference contracts have improved over time and have become a state that can follow the spot price without being based on a certain term. Thus, CFDs that are purified from intrinsic value monitors the spot price of a particular underlying asset (say, Google stock or DAX contract) and offers its investors the opportunity to benefit from spot price fluctuations.

In which indices can you trade? There is no contract size, maturity, etc. set for the CFDs. Therefore, each brokerage firm can create its own. In different contracts, you get the difference between the purchase price and the sale price. For example, when you buy 100 DAX CFDs, you are not physically considered to have received the contract, but you are in the price action. The calculation is as follows. Let's assume that the trader buys 10 Dax contracts at the level of 10000 and sells them at the level of 10100. (10100-10000 *10 you will earn profit from the transaction. Since the Dax Index is priced in EUR, the investor will earn 1,000 EUR in this transaction. You can do this at BalanceFX with a principal amount of more than 2,000 EUR.

Why should you invest in the index?