Question: How to start trading Stock Indices on Axi MT4?
Trade Stock Indices on Axi MT4
The easiest way to add major global companies to your trading portfolio.
When trading indices with Axi, you are not investing in a physical asset such as a stock.
Instead, you simply trade on the real-time price movements of the underlying instrument on the open market.
This type of trading is known as CFD (contract for difference) trading.
Why trade indices CFDs with Axi?
- Real-time prices linked to the market performance of the underlying security.
- No brokerage fees and no commissions on standard accounts.
- Possibility of earning in both price directions.
- Super competitive spreads with ultra-fast execution speed.
- Low margins – starting from 1%.
- Presence of major indices such as FTSE, Dow Jones, and S&P.
What is Stock Index CFD?
An index is a way of measuring the performance of a specific sector or group of companies.
For example, the Dow Jones Industrial Average, commonly known as the Dow, is a stock market index that represents the combined value of 30 of the largest U.S. publicly traded companies.
There are a variety of equity indices globally, each measuring a different aspect of global and local markets.
How does Stock Indices trading work?
When trading indices with Axi, you are not investing in a physical asset such as a stock.
Instead, you simply trade on the real-time price movements of the underlying instrument on the open market.
This type of trading is known as CFD (contract for difference) trading.
Example 1: Earning from a price increase
Let’s assume the Dow Jones Index has a market value of 25,585 points, but you believe the value will increase over time.
You then decide to open a CFD position on the index, the value increases before the contract expires and you will generate a profit based on the difference between the purchase price and the sale price.
However, if the value of the index has dropped below the purchase price when the contract expires, you will lose.
Example 2: Earning from a price drop
Let’s admit again that the Dow has a market value of 25,585 points, but this time you feel it is overvalued, so you open a CFD position speculating that the price will drop over time.
If the price has actually dropped by the time the contract expires, you will generate a profit, conversely, if it has increased you will suffer a loss.
Profiting from bearish price movements is one of the unique aspects of trading with CFDs; if you were buying the physical shares of a company, you could generate a profit only if the value of the company increases.
Use Axi’s High Leverage to trade Stock Indices
By trading indices with CFDs with Axi, you can take advantage of leverage.
This allows you to use a relatively small amount of capital to get a higher exposure to the position.
It is important to keep in mind that if on the one hand leverage offers the possibility of obtaining greater profits with a limited deposit, on the other it can also result in an increase in risk and larger losses, sometimes higher than the margin available on the account.