A stock index is a measure of the market value of a company. Many indices are compiled by news or financial services companies as benchmarks for portfolio performance evaluation. The specific index level is a general status reflecting the national securities market and the overall strength of the national economy.
The index can be classified according to its calculation. Price-weighted indices, such as Dow Jones Industrial, only calculate the index at the price of individual companies. Thus, although a single price change is not significant, it will significantly affect the index, and the index will not consider the relative size of the entire company. Conversely, another market-weighted or capital-weighted index is based on the size of the company, such as the Hong Kong Hang Seng Index, where small price changes in large companies can significantly affect the index.
The securities indices of today's society are diverse. The British Dow Jones Industrial Index, Standard & Poor's 500 Index, Nasdaq Index, British FTSE 100 Index, French CAC 40 Index, German DAX Index, Japan Nikkei Index, UK ASX200 Index, and Hong Kong Hang Seng Index.
Why investment index
1. No matter whether it is rising or falling, profit can be different from spot trading such as stocks and bonds. Stock index trading can be short, so even if the price falls, you can make a profit. In other words, not only can the operation be carried out in the bull market, but also the bear market can also obtain benefits. In the past, holding a short position was something that only a professional trader could do, and building a short position through stock index futures trading would be more efficient and easier to trade against actual stock short positions.
2. High capital utilization – low commissions and margins Since index futures trading usually requires only a small amount of margin, you can use the portfolio of securities instead of collecting all the assets together. Unlike futures exchanges, the margin for each product is the same. Stock index futures trading can be said to be a highly efficient and efficient way of investing.
3. Achieve diversified investment and risk hedging – risk hedges in Japan can directly understand the world's major stock market index futures, and achieve the effect of diversification through real-time trading. In addition, when holding stocks in Japan and other countries, if the stock price is expected to fall but does not want to sell, in this case, the risk of falling assets can be hedged by the pipeline that builds short positions in the index futures trading, thereby offsetting the losses.
4. Global stock index trading can basically achieve more than 20 hours of trading. The world's major index futures, represented by the UK Industrial 30 Index Futures, have a trading time of more than 20 hours per day. By significantly longer than the time of futures trading, the effect of new trading opportunities and risk avoidance can be achieved.
5. Stock index futures trading can be traded according to the market price. As long as the customer agrees, the market price can be traded at any time. There is no need to wait for the futures exchange to wait for the match.
6. Even if the big order is placed, it will not affect the price, because the market size is very large, so even if it is the big single, it has no effect on the price.
