Trading in stock indices in the Forex market

Trading instruments: Global stock indices

Leading American, European, Australian and Asian stock indices

Global
stock indices

Advantages
Index investing

High liquidity;
Reduction of market risks through hedging;
The indices are perfect for speculative trading as this
instrument is sensitive to economic news releases;
Low margin requirements;
Diversification of an investment portfolio across different financial instruments.

LiteFinance’s clients can trade indices by buying or selling them as if they were usual stocks. A trading index includes a certain group of companies, and its price reflects an average price of these companies’ stocks. Contracts for difference on stock indices have an expiration date and belong to unlisted trading instruments; they let a trader speculate on changes in the price of the instrument that a contract for difference is based on.

Indices are usually linked to a particular region, and each of them can estimate the state of economy in this region. If an index falls due to a decrease in the price of the companies’ stocks included into this index, it indicates possible problems in the whole economy or in its portions.

For instance, FTSE100 is often used as a barometer of the British economy. Thus, if you consider the economic prospects of Great Britain to be negative, you may go short and sell FTSE100 expecting that the price of the index will decrease. Other popular regional indices are DAX30 (Germany) and CAC40 (France).

Besides reflecting a general economic state, indices can estimate the prevailing market sentiment. Thus, you can understand whether most investors are bears or bulls and rely on this information when forming your own strategy.

Those traders who trade indices have a sheer advantage over other traders due to the high liquidity of this tool, the opportunity of hedging risks and low margin requirements.

Specification of contracts

Available in trading accounts:

ECN
CLASSIC

Symbol

Instrument

Nominal Value of the contract

Currency

Margin %

Spread¹

Commission per 1 lot⁴

Swap value in margin currency per 1 lot²

Swap Long

Swap Short

ASX200

ASX 200 (index of the Australian stock exchange)

Index contract level*1

AUD

2.0

1.6

3.5 USD

-3.54

-3.66

CAC

CAC 40 (index of the Euronext Paris stock exchange)

Index contract level*1

EUR

1.0

8.2

3.5 USD

-2.875

-4.312

FDAX

DAX40 (index of the German stock exchange)

Index contract level*1

EUR

1.0

8.1

3.5 USD

-2.876

-4.314

FTSE

FTSE 100 (index of the London Stock Exchange)

Index contract level*1

GBP

1.5

8.2

3.5 USD

-3.598

-3.48

HK50

Hong Kong 50 (index of the Hong Kong Stock Exchange)

Index contract level*1

HKD

5.0

20.2

3.5 USD

-3.704

-3.47

IBEX35

IBEX 35 (index of the Madrid Stock Exchange)

Index contract level*1

EUR

5.0

5.1

3.5 USD

-0.289

-0.433

NI225

Japan225 (index of Japan Stock Exchange)

Index contract level*1

JPY

1.0

16.1

3.5 USD

-3.485

-3.725

NASDAQ 100 (index of the Nasdaq stock exchange)

Index contract level*1

USD

1.0

0.9

3.5 USD

-12.062427

-0.614621

SING

SG25 (Singapore 25 index)

Index contract level*10

SGD

1.0

3.5 USD

-3.785

-3.424

SPX

S&P 500 (index of the New York Stock Exchange)

Index contract level*1

USD

1.0

0.4

3.5 USD

-9.779825

-0.514728

SX5E

EURO STOXX 50 (index of the Eurozone blue chip companies)

Index contract level*1

EUR

1.0

7.2

3.5 USD

-2.879

-4.317

USDX

US Dollar Index

Index contract level*100

USD

1.0

0.07

3.5 USD

-3.785

-3.424

VIX

CBOE Volatility Index

Index contract level*100000

USD

5.0

0.001

3.5 USD

DJIA (Dow Jones index of the New York Stock Exchange)

Index contract level*1

USD

1.0

1.5

3.5 USD

-9.773815

-0.514411

Symbol

Instrument

Nominal Value of the contract

Currency

Margin %

Spread¹

Commission per 1 lot

Swap value in margin currency per 1 lot²

Swap Long

Swap Short

ASX200

ASX 200 (index of the Australian stock exchange)

Index contract level*1

AUD

2.0

1.6

None

-3.54

-3.66

CAC

CAC 40 (index of the Euronext Paris stock exchange)

Index contract level*1

EUR

1.0

12.8

None

-2.875

-4.312

FDAX

DAX40 (index of the German stock exchange)

Index contract level*1

EUR

1.0

12.7

None

-2.876

-4.314

FTSE

FTSE 100 (index of the London Stock Exchange)

Index contract level*1

GBP

1.5

12.1

None

-3.598

-3.48

HK50

Hong Kong 50 (index of the Hong Kong Stock Exchange)

Index contract level*1

HKD

5.0

59.3

None

-3.704

-3.47

IBEX35

IBEX 35 (index of the Madrid Stock Exchange)

Index contract level*1

EUR

5.0

9.69

None

-0.289

-0.433

NI225

Japan225 (index of Japan Stock Exchange)

Index contract level*1

JPY

1.0

516.1

None

-3.485

-3.725

NASDAQ 100 (index of the Nasdaq stock exchange)

Index contract level*1

USD

1.0

5.9

None

-12.062427

-0.614621

SING

SG25 (Singapore 25 index)

Index contract level*10

SGD

1.0

None

-3.785

-3.424

SPX

S&P 500 (index of the New York Stock Exchange)

Index contract level*1

USD

1.0

5.4

None

-9.793637

-0.515455

SX5E

EURO STOXX 50 (index of the Eurozone blue chip companies)

Index contract level*1

EUR

1.0

11.8

None

-2.879

-4.317

USDX

US Dollar Index

Index contract level*100

USD

1.0

0.07

None

-3.785

-3.424

VIX

CBOE Volatility Index

Index contract level*100000

USD

5.0

0.001

None

DJIA (Dow Jones index of the New York Stock Exchange)

Index contract level*1

USD

1.0

6.7

None

-9.783353

-0.514913

Spreads and swaps are indicated according to the current market conditions (data is recorded in the table, straight from the trading server, and is updated in real time). LiteFinance has the right to change spreads and swaps according to current market conditions, depending on the volatility of one or another financial instrument and/or interest rate size, when such changes are required.
Swaps are calculated at 00:00 of each working day (according to the time specified in the LiteFinance web terminal). Triple swaps are calculated from Friday to Monday.
A SWAP rate is specified as a percentage of the current price, in the quote currency of the index.
If your trading account is denominated in a different currency, commissions will be calculated based on the USD rate on a given date.
Margin requirements can vary from one asset to another. You can check the actual leverage value for each asset in the "Info on instrument" section of the Client Profile.
The list of trading instruments and their specifications are provided for guidance purposes. Some instruments may be not available for trading on the company’s platforms.
Margin requirements for a number of trading instruments can be temporarily modified ahead of major macroeconomic events.

CFD on Indices Dividend Adjustment

The Company has the right to apply a dividend adjustment on the CFDs on indices. The dividend adjustment date corresponds to the ex-dividend date of the underlying asset. This date is the date of fixing the list of shareholders claiming dividends. The dividend adjustment is calculated for all open positions. For the long positions, the adjustment value is always positive, while for the short positions, it is negative. The dividend adjustment depends on the size of the contract involving the instrument and the value of open trading positions.

The formula for calculating the dividend adjustment is as follows:

Index dividend value × Volume × Base Currency Rate

Dividend Adjustment:

Based on ordinary dividends for the constituents of each index. Dividend Adjustment applied to long positions is accrued on the ex-date and settled during T + 2 (after 2 business days); Dividend Adjustment applied to short positions is settled during Т + 0.

According to the estimate, the adjustment will be either credited or debited to the client’s account. If the client holds an open long (buy) position, their account will be credited with the dividend adjustment amount. If the client holds an open short (sell) position, the amount will be debited from their account.

Dividend Adjustments are specified in the base currency and are updated on a weekly basis.