Indices are the most popular form of CFDs. IC Markets has a large range of Indices from around the world to choose from, including the Australian S&P 200 Index, UK FTSE 100 Index, US E-mini S&P 500 and US DJIA Index.
A stock index is a good indicative measure of market performance. Indices such as the FTSE 100 and DJIA Index are baskets of blue chip stocks listed on the exchange and are generally a good measure of the current market sentiment. A change in the performance of any constituent stock in an index is reflected in a change in the overall value of that index.
Indices have the advantage of allowing traders to take a wider view of a basket of stocks rather than taking a view on one individual stock alone.
Online CFD and futures based indices are offered on both IC Markets MetaTrader 4 and cTrader Platforms
Indices Spreads – Cash
IC Markets offers competitive spreads across all of our cash Indices, including the E-mini S&P 500 Index from 0.5 points, the FTSE 100 Index from 1 point, Xetra DAX Index from 1 point and S&P 200 Index from 1 point.
The following table shows the best available spread for our selection of global Indices.
|AUS200||S&P/ASX 200 Index||1
|US30||DJIA Index||1 - 4
|US500||E-mini S&P 500 Index||0.4
|UK100||FTSE 100 Index||1 - 5
|DE30||Xetra DAX Index||1 - 8
|HK50||Hang Seng Index||8
|USTEC||E-mini Nasdaq 100||2
|F40||CAC 40 Index||1 - 6
|STOXX50||Dow Jones EURO STOXX 50 Index||2
|JP225||Nikkei 225 Index||7 - 8
|US2000||Russell 2000 Index||0.3
|CHINA 50||FTSE CHINA 50||13
Please note: This table illustrates the lowest spreads available on these indices available during the opening hours of the trading session in the underlying market. Spreads may we wider when the underlying market is closed or during extended trading hours.
Buying the Australia 200 Index
Opening the Position
The price of the Australia 200 Index is 4950.00/4951.00. You are of the view that blue-chip stocks are undervalued so you decide to buy 2 contracts at 4951.00. (One contract is equal to $1 per index point). No commission is charged on Indices.
For every point that the bid quote on the Australia 200 Index rises above 4951.00 you will make a profit of $2 AUD, for every point the bid quote falls below 4951.00 you will lose $2 AUD.
Closing the Position
Four days later, the Australia 200 Index has risen to 4970.00/4971.00 and you decide to take your profit. You close your position by selling 2 contracts at 4970.00.
The gross profit on your trade is calculated as follows:
To calculate the net profit you must include any financing or dividend adjustments. Financing adjustments are applied to Indices daily, in the case of a ‘long’ position interested is debited and in the case of a ‘short’ position interest is credited. Dividend adjustments are also applied whenever a stock in the relevant index goes ex-dividend.
You should be aware that if the market had moved in the opposite direction, you would have made a loss that could have exceeded your initial deposit.
IC Markets Contract Specification Sheet provides further information regarding the Indices on offer their trading hours and spreads.