Indices & indices futures trading

Are you new to indices trading? Here are some key questions and answers to help get you started.

What is indices and indices futures trading?

Indices are financial instruments that track the performance of a group of assets, such as equities. So trading on indices means getting exposure to a whole group of assets with a single trade.

By tracking the performance of a large group of shares, a stock index aims to reflect the state of a broader market. There are stock indices that represent the stock market of a whole country, such as the US 500, and those that represent a specific sector, such as the NASDAQ Biotechnology Index which consists of about 200 firms in the biotechnology industry.

This means that indices tend to be diversified, and you’re effectively getting access to a whole sector or economy with a single trade.

At Capital.com, you can trade both spot index CFDs and index futures – derivatives that track future prices of major indices, often used to trade or hedge expectations around market direction, volatility or macroeconomic events. Note: knock-outs are not available on futures.

Why trade indices?

Since an index is a measure rather than a tangible thing, it cannot be bought outright: you cannot buy a portion of the UK 100, for example. Instead you’d need to buy shares in all of its constituent companies, in the representative proportions.

Trading makes indices more accessible, by giving you exposure to their price movements without having to own any of their constituents. This means you can get exposure to an entire sector or economy with a single trade, and instantly diversify your portfolio.

Index futures offer an additional way to speculate on broader market movements, often with different trading hours and contract structures than spot index CFDs. Futures contracts are widely used by traders looking to act on earnings seasons, economic data releases or geopolitical risks.

As you’re not owning the underlying, you can also go short as well as long. Many trading providers continue to price indices after the market closes, too, meaning they are tradable 24 hours a day, seven days a week.

Why trade indices with Capital.com?

We offer CFD and knock-out trading on a range of global indices (only CFDs available on index futures), with out-of-hours pricing that means you can trade many of them around the clock.

Use our smart tools and comprehensive education to assist you in trading major cash indices or futures-based index markets at your own pace, or integrate with leading third-party tech such as TradingView and MT4.

Identify potential entry and exit points with our smart, intuitive charting tools, and set price alerts to notify you of significant market moves. Protect yourself against adverse market moves with our range of risk-management tools, including trailing stops which lock in positive market moves while protecting against losses.*

Stay up to date with the latest indices and index futures market news, insights and analysis.

Learn more about how to trade indices

*Stop-losses are not guaranteed. Guaranteed stop-losses incur a fee if activated.