Big Brother of All Indices! S & P 500, The Most Widely-Traded Index in the World
One of the most popular segments for investment across the world based on the price movement of its underlying stock. Indices represents the overall performance of stocks of the companies that come under that particular index. These companies are different for different indices. Indices facilitates the investor with general awareness about the ups and downs of the financial market creating the possibilities and opportunities in this segment.
For example, Index S&P 500, is a stock market index which tracks the performance of top 500 companies listed on stock exchanges in the United States.
CFD trading can be done in markets like commodities, forex and share markets.
A contract for differences (CFD) is an agreement between an investor and a CFD broker to exchange the difference in the value of a financial product between the time the contract opens and closes.
Every contract has a sell price and buy price which is the derivative of the current market price of underlying instrument. This difference in trading price results in gain or loss.
Trading on CFD’s needs an advanced level of trading strategy as there will be no physical delivery of the underlying asset. While the CFD investor never really owns the asset. The investor gets return on their investment based on the price change of that particular asset. For example, an investor can speculate on the price movement of a particular asset just by opting to buy it through CFDs rather than investing in real asset.
Investors can speculate on the market movement to move in favor or against of their current market position. If the investor’s position has increased in price than the purchase price, then his net equity for that transaction becomes positive. The gain from the transaction is then settled in the investor’s trading account after settling applicable charges.