Index CFDs
Index CFDs allow you to trade on the price movements of an entire Stock index, without owning any of the stocks within that index. HMS TRADER 2 allows for trading on 20 stock indices including:
- S&P 500 (US)
- NASDAQ 100 (US)
- Dow Jones Industrial Average (US)
- FTSE 100 (London Stock Exchange)
- DAX 30 (Frankfurt Stock Exchange)
- CAC 40 (Paris Stock Exchange)
- SMI (Swiss Market Index)
- OMX (Stockholm Stock Exchange)
- Nikkei 225
- Dow Jones Euro STOXX 50 Index
What is the main advantage of trading Index CFD's?
One of the advantages of trading Index CFDs with HMS Trader 2 is that you can choose any size of risk exposure. You can decide yourself the number of currency units per Index point you wish to speculate, with a minimum of just one currency unit.
For example:
If the Nasdaq 100 index stands at 1,100, the value of one Nasdaq CFD will be USD 1,100
USD 1.00 (one unit)per index point, means your exposure will be 1 x USD 1,100
(The Index value) = USD 1,100
USD 5.00 (five units)per index point, means your exposure will be 5 x USD 1,100
(The Index value) = USD 5,500
Is Trading CFD's High Risk?
CFDs are not for everyone:
The power of leverage/margin can work against you just as quickly as it can make you profits. If you get the markets wrong, always remember to apply adequate risk management strategies. Both losses and profits may accumulate rapidly when using the full leveraging of CFD's.
Warning:
While HMS Markets will always seek to provide tradable quotes, if the market becomes untradeable, HMS Markets may not always be able to quote you a price, or the spread between bid and ask prices may widen substantially.
Financing costs on long positions may be substantial, just as they would be if you undertake traditional margin trading. Clients should always keep an eye on the costs associated with maintaining a long position for a lengthy period of time.
