CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the High risk of losing your money.

Prime Stock Market Indexes

EURO STOXX 50 (EUSTX50), FTSE 100 Index (UK100), CAC 40 Index (FR40), DAX30, RTS Index

Hong Kong 50 Index (HK50), Nikkei 225 Index (JPN225), FTSE China A50 Index (CHA50), KOSPI Composite Index (KS11)

Standard & Poor's 500 (S&P 500, US500), Dow Jones Industrial Average (DJI, US30), Nasdaq 100 Index (NDX, US100)

S&P/ASX200 (AUS200)

What Makes Stock Index Trading So Popular?

  • Trading indices is a way to gain exposure to global or regional markets without having to analyse the performance of individual companies. Popular stock market indices usually provide traders with a high degree of liquidity, long trading hours and tight spreads.
  • Stock indices reflect the condition and performance of the entire economy. Investors do not have to perform thorough research on individual company reports.
  • The price movement of the index is a lot smoother as no individual stock can induce an extreme price spike. This naturally makes index trading less volatile.
  • Due to the amount of activity that takes place on individual stocks, indices offer for traders to pick out numerous profitable trading opportunities.

Difference between Dow, Nasdaq, and S&P 500

  • Dow Jones Industrial Average

    First calculated on May 26, 1896, the index is the second-oldest among the U.S. market indices. The Dow Jones Industrial Average (DJIA) is a widely-watched benchmark index in the U.S. for blue-chip stocks. The DJIA is a price-weighted index that tracks 30 large, publicly-owned companies trading on the New York Stock Exchange and the NASDAQ. As with all stock prices, the prices of the constituent stocks and consequently the value of the index itself are affected by the performance of the respective companies as well as macroeconomic factors.

  • Nasdaq 100

    The Nasdaq 100 is the youngest of the three indexes beginning trading in 1985. It represents the largest non-financial companies listed on the Nasdaq exchange and is generally regarded as a technology index given the heavy weighting for tech-based companies. The Nasdaq 100 is based on the market capitalization of its components.

  • S&P 500

    The S&P 500 is a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices. The S&P 500 index is a capitalization-weighted index and the 10 largest companies in the index account for 26% of the market capitalization of the index. Although the index includes only companies listed in the United States, companies in the index derive on average only 71% of their revenue in the United States.

How to Calculate an Initial Margin Requirement?

The calculation of required margin for Indices is performed as follows:

Required margin: Number of lots × Units traded (Contract size in micro-lots) × Market price × Margin percentage

* Units expressed in the currency of the Index instrument

* Margin calculation of Indices CFDs has nothing to do with your account's the leverage settings

Let us assume we want to invest in contracts for the Hang Seng China 50 Index (HK50):

* Basic settings of HK50 on Eagles Markets imply that the contract volume of 1 standard lot is "10", margin percentage is set on 1% and the currency in which this Index is denominated is HKD.

If the current price of HK50 is 25777/25770, and the exchange rate of USD/HKD is 7.84015/7.84006, then required margin for buying 1 lot of this index would be:

1 x 10 x 25777 x 1% = 2577.7 HKD

Now, as our platform's trading currency is US$, we want to convert HK dollars into american dollars. Consequently our required margin in USD will be:

2577.7 ÷ [(7.84015 + 7.84006)/2] = 328.78 USD

* When you trade contracts of the non-US Indexes, your trades will be made made in the currency of the underlying market you are trading. So if you are trading the UK Index your position is made in sterling; if you are trading Germany 30 your trade is made in euros, but if you are trading US Crude your trade is made in US dollars. Other commodities such as copper, gold, silver, cocoa and orange juice are also traded in US dollars.

* Average price = (Ask price + Bid price) ÷ 2

How to calculate P&L in stock index trading?

In order to calculate P&L for Index CFDs, the simple maths is as follows:

P&L = Lots × Units traded (Contract size in micro-lots) × Pip movement

Units are expressed in the currency of the market's location

Pip movement of the BUY orders = Ask price at closing time — Bid price at opening time

Pip movement of the SELL orders = Ask price at opening time — Bid price at the time of closing a position

Let's assume we carry on with trading the HK50 Index.

Eagles Markets currently quotes the price of HK50 at 25777/25770 points. Lilly decides to buy one lot of HK50, when Tony sells one lot of this underlying instrument. Consequently, our client's P&L will be:

A week later the price of HK50 rises to 26587/26576 points, and the USD/HKD is valued 7.84015/7.84006.

Lilly's P&L: 1 × 10 × (26576 — 25777) = 7990 HKD,
and after converting into USD: 7990 HKD ÷ 7.84015 = 1019.11 USD

Tony's P&L: 1 × 10 × (25770 — 26587) = —8170 USD,
and after converting into USD: —8170 ÷ 7.84006 = —1042.08 USD

*When you convert the currency of the Index into USD, please pay attention.

In case of the PROFITING ORDERS you act as if you were selling the underlying Index in the local currency, to turn it into profits in USD. The price after the conversion is the price in currency in which the Index is denominated, against the current USD ask price (or instead: USD against the bid price in currency in which the Index is denominated).

In the case of LOSING ORDERS you act as if you were buying the Index currency to complete the order settlement. The price after the conversion is the real-time price in currency in which the Index is denominated, against the current USD bid price (alternatively: USD against the ask price in the Indexes currency).

Summarizing, if the price of the Index currency against the USD is used, the P&L converted into USD equals: the P&L of the Index currency × convertion price.

Analogically, if the price of the USD against the Index currency is used, the P&L converted to USD equals: the Index currency P&L ÷ convertion price.

Underlying Factors Affecting the Stock Market

The local centeral bank's interest rate policy, higher interest rates usually lead to decreased profits for companies, due to higher interest repayments, it negatively impacts the corporate earnings report.

The corporate earnings reports or announcement, earnings expectations drive stock valuations. The degree to which consensus forecasts differ from the actual data release can impact volatility in the market.

Geo-Political developments, the stock index is affected by political news and instabilities around the world, due to its huge exposure to the global economy, any developments trade war front between the countries can also cause fluctuations.

  • Swap Fee

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  • Trading Hours

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  • Spread

    The spread are floating, apply for Raw Spread Account to get the best trading environment