Indices are used to track the performance of a basket of securities. For example, if you are trading indices from the stock exchange index, which comprises of several stocks, then you are essentially opening positions on several stocks at once. This is immediately a more effective way to diversify your investment portfolio and hedging the risks by investing across different sectors and trading in a basket of highly efficient stocks.
For this reason, when you are trading indices, it is not necessary to analyse each company, as an index has strict conditions for companies to enter. In this respect, instead of trading individual shares and needing to spend time gathering information on the companies performance and analysing them, you can diversify your portfolio for more effective strategies and consistent results.
Index CFD’s cover all the well-known indices from around the world, enabling traders to partake in the world markets, including investing the SP500 & German Dax.