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Indices are a statistical measure of the performance of an asset class in the securities market which allows traders to understand and track the performance of a class of assets. Indices cannot be purchased directly - traders purchase an investment product such as an index fund or stock index CFD. Stock index CFDs (Contract for Difference)in the stock and bond market are financial instruments covering the value of a portfolio of securities which belong to a specific segment. There are various instruments that enable traders to take a short position on an index or have leveraged exposure to the index.
The advantage of trading CFDs based on indices is that the trader enjoys exposure to the wide variety of assets comprising the index, in a single transaction. Furthermore, trading CFDs based on indices is an easy field to enter, compared to investing in stocks. Indices tend to be a more balanced avenue for trading, since it is less affected by the fluctuation of a single stock, but is based on the collective performance of a large number of stocks.
Moreover, indices and stock index CFDs allow long or short trading, while certain stocks cannot be traded short. This expands trading opportunities by enables traders to profit on both the rise and fall of stocks. Indices are also liquid and volatile, with extensive trading hours, which are additional benefits for traders.
Indices are a great way to understand the state of an economy at a high level. They offer a single statistic that provides a basic understanding at a glance. Looking at the historical movements of indices, you can understand market reactions to various scenarios throughout financial history, enabling traders to learn from the post and improve their future decisions relating to trading CFDs and stocks
There are different types of indices, and stock index CFDs, including capitalization indices, fixed income indices, sector indices, residential property indices, strategy indices and volatility indices.
Examples of stock index CFDs include Standard and Poor 500, one of the key indices in the United States. It covers 70% of the stocks traded in the USA. The Dow Jones Industrial Average (DJIA) is another major index, which covers stocks from 30 of the United States publicly traded enterprises.
One of the advantages of trading stock index CFDs is the wide selection available to traders so that each trader can invest in a field in which he/she has the widest knowledge and are familiar with.
DigitalBit is an international, multilingual establishment. DigitalBit ranks amongst the fastest growing entities in the financial industry. We specialize in many trading activities, such as Forex, CFDs, Indices trading, Commodities trading, and metals.
One of DigitalBit's focus areas is indices trading, which is considered to be a great option for beginner traders as it's fairly easy to learn.
One of our key values is providing fair, transparent and professional service to all our clients and business partners. We believe that successful trading starts with excellent platforms, professional trading specialists and top trading conditions. We value integrity, innovation, and success as the most important parts of who we are as a brokerage. All these combined is what differentiates us from other companies on the market.
The reason why so many traders choose to trade indices with DigitalBit is simple - our excellent service and support. We guide our trader's hand in hand with various webinars, ebooks, trading specialist 1x1 lessons and much more.
Trading indices allow you to diversify your investment tools and invest in the world's major financial centers. We provide our traders with a leverage of up to 100:1, tight spreads and around-the-clock trading. With DigitalBit, you can trade the world's leading indices (bourses) including stock trading, Dow Jones, FTSE, DAX, JSE and much more. With all this combined, DigitalBit is your one-stop-shop for the ultimate trading experience.