Advantages
One of the most popular methods of participating in the capital markets is to purchase corporate stock or an index fund. While these activities are the backbone of many investment strategies, they have several disadvantages. Large fees, considerable required capital and convertibility issues limit their utility to active traders.
In contrast, the trading of an enhanced index CFD has several unique advantages:
- Limited Trade Restrictions
- Low Transaction Costs
- Availability of Leverage
- Variable Trade Sizes
Many individuals are interested in seeking opportunity in the world's leading equities markets without owning an index fund or basket of stocks. Indices trading or spread betting on indices are practical alternatives.
Underlying Markets
FXCM offers clients a variety of indices products based on leading international equities marketplaces:
| Symbol |
Underlying Index |
Denomination |
Average Spread |
|
|
|
|
| AUS200 |
ASX SPI 200 Future |
AU$ |
1.79 |
| CHN50 |
SGX FTSE China A50 Future |
US$ |
9.59 |
| ESP35 |
IBEX35 Index Future |
€ |
7.64 |
| EUSTX50 |
Euro Stoxx 50 Future |
€ |
1.12 |
| FRA40 |
CAC40 Index Future |
€ |
1.38 |
| GER301 |
DAX Index Future |
€ |
1.18 |
| HKG33 |
Hang Seng Future |
HK$ |
10.19 |
| JPN225 |
Nikkei 225 Dollar Future |
¥ |
11.68 |
| NAS100 |
E-Mini Nasdaq 100 Future |
US$ |
1.12 |
| SPX500 |
E-Mini S&P 500 Future |
US$ |
0.49 |
| UK100 |
FTSE 100 Index Future |
£ |
1.18 |
| US2000 |
E-Mini Russell 2000 Future |
US$ |
0.32 |
| US30 |
E-Mini Dow Future |
US$ |
1.99 |
Disclosure
1
GER30 average spread displayed is for peak hours only (7:00-21:00 GMT). Effective from February 11th 2019, the GER30 remains open during off peak hours (0:30-7:00 GMT). Spreads may widen during off-peak hours, for more information on GER30 trading hours and spreads, please visit FXCM Help.
FXCM presents in-depth descriptions of all index CFDs via the Index Product Guide. The Index Product Guide lists each product’s vital statistics. Average spreads, trading hours and contract specifications are available for quick reference.
Indices Pricing
When trading indices products with FXCM, the only cost is the spread. The enhanced execution model ensures some of the lowest spreads in the industry, with no stop and limit trading restrictions.
Decimalised pricing is a tool that enables FXCM to offer tighter spreads and transparency to indices traders. Under decimalised pricing, FXCM quotes out to more decimal places than most competitors. As a rule, smaller increments equal tighter spreads.
For instance, FXCM quotes the GER30 in terms of hundredths rather than tenths:
GER30
- Competition: 12189.0
- FXCM: 12189.05
FXCM supports a diverse collection of software platforms, featuring the award-winning Trading Station. Each platform automatically calculates the cost of each trade using the following formula:
Spread
x Pip Cost
x Number of Contracts
= Total Transaction Cost
Indices Trading Details
In addition to cost, traders must be aware of several other details unique to indices:
Contract Sizes:
Each have a specific minimum and maximum position
Trading Hours:
Trading hours vary depending upon the locale of the index.
Financing:
Costs associated with holding a position into the close (rollover) vary according to index.
Margin Requirements:
Margins change frequently and depend on the volatility of the underlying market.
Enhanced Execution:
FXCM offers trading with no stop and limit restrictions on select indices.
Getting Started
Incorporating indices trading into your portfolio is easy. Opening an account with FXCM is all that is needed to begin capitalising on opportunity in the world's most influential equities marketplaces.
