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Full indices CFD details, including dealing hours, spreads and margins.
Full indices MT4 product details, including dealing hours, spreads and margins.
On 22 indices, including Wall St and FTSE 100
Opportunities across major and niche indices
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From 1 point on FTSE 100 and Australia 200
As well as expert analysis to help with your strategy
Execute larger trades using IG's outstanding trading technology
ASX 200 JUN15 Future
Australia 200 Cash
Buy at 5501.5
1 standard contract
Equals A$25 per point
Margin = Number of contracts x value of one contract x index level (mid price) x margin rate (0.5%)
1 x A$25 x 5,501 x 0.5% = A$687.63
|What happens next?||
The market rallies dramatically, moving up 149 points by 4.50pm, when funding is calculated. It drops back a little overnight, down 10 points from 4.50pm the previous day.
Funding = (One-month bank bill swap rate + 2.5%) x (size of position) / 360
(1.9% + 2.5%) x (5,650 x A$25) / 360 = $17.26
5639.5 / 5640.5
Sell at 5639.5
|Overall market movement & profit/loss||
5639.5 – 5501.5 = 138
Each contract is worth A$25 per point (so A$25 x 138 points)
Gross profit = A$3,450
1-point IG spread (included above)
Funding cost: A$17.97
A$3,432.74 net profit subject to tax
If the market dropped 139 points instead (with a spread of 1 point):
(-139 - 1) x (A$25) - A$17.26
Net loss = A$3,517.26
A stock index is a hugely important part of our financial world, but it is nothing more than a number representing the top shares from a particular exchange.
For example, the FTSE 100 represents the largest 100 companies traded on the London Stock Exchange. If, on average, the share price of these companies goes up - then the FTSE 100 will rise with them. And if they fall, it will drop.
Other examples of stock indices include:
Most of these are calculated using a capitalisation-weighted average, which means the size of each company is taken into account. The more a particular company is worth, the more its share price will affect the index as a whole.
However, the Dow Jones and Nikkei are price-weighted indices, where shares with higher prices have more influence. This means a stock trading at $100 is given 10 times more weight than one at $10.
Watch Sara explain the basics of
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