About Indices
Indices Trading is a term that is commonly used by indices investors & stock indices traders to describe trading activity in the stock indices trading market that is carried out by traders, investors and speculators.
In indices trading a trader can buy or sell indices. A trader will buy indices if they think the value of the indices instrument is likely to appreciate in the future. A Indices Trader will sell indices if they think the value of the indices instrument is likely to depreciate in the future.
The Indices Trading Market is an over the counter market which means trading is carried out through a network of the big international banks; this indices trading network is commonly referred to as the interbank network. This interbank indices trading network consists of banks and indices brokers which are in different locations. These interbank network is responsible for providing the stock indices trading prices at any particular time to the traders and other stock indices market participants who want to buy or sell indices. In indices trading the stock indices trading price is constantly changing and this stock indices trading price is denoted by what is known as a Indices Trading Quote. In Indices Trading the Indices Price is displayed as a Indices Quote. This indices trading quote is constantly changing and the interbank network will update automatically the current indices trading quote and stock indices traders can then trade the stock indices at the current stock indices trading price.
Indices Trading Quotes
Trading indices trading prices of indices trading instruments is displayed using Indices Trading Quotes. This is the stock indices trading price at which any indices trader wanting to trade indices will trade at.
Because stock indices trading prices are constantly changing it means that stock indices traders can take advantage of these stock indices trading price movements to make profits by trading these stock indices trading price movements. The stock indices trading price of any indices trading instrument will keep moving because of demand supply. This is because there are many participants trading indices instrument in the open stock indices market and therefore this means that the stock indices trading price quotes will get determined by the current market forces. These market forces may be determined by factors such as an increase in demand for indices.
Indices Trading Pips
In indices trading the stock indices trading price moves are measured in points commonly known as Pips in the stock indices trading market. The pip is used to calculate the profit or loss that a Indices Trader makes in a particular trade. For example if a trader makes a trade which moves 50 pips in his direction, then the profit of the trader will be calculated as 50 indices trading pips. Pip in indices trading is represented as the second last decimal point in the Indices Trading Quote and it is made up of pipettes - pipettes are fractions of a Indices Trading Pip.
Indices Trading Lots
In stock indices trading -indices is traded in units known as indices lots or indices trading contracts.
Indices Trading Leverage
Because not many stock indices traders can afford to trade large units of indices trading contracts, there is indices trading leverage in indices trading which means that stock indices traders can borrow money and use the borrowed money to make trades with. For example stock indices leverage of 100:1 means that a trader with capital of $10,000 can borrow upto 100 times using the 100:1 leverage option & therefore after borrowing using this indices trading leverage the trader will have a total of $10,000 multiplied by 100, which means the trader will have a total of $1,000,000. This stock indices leverage is what makes Indices accessible to retail indices traders because retail stock indices traders can begin with little capital of their own & use indices trading leverage to borrow the rest of the money required for trading. The money that the trader deposits is referred to as the trader’s margin & a trader can continue borrowing money using this stock indices leverage option as long as they have the required indices trading margin in their stock indices trading account. This is why traders must have the required indices trading account balance in their stock indices account to open the trades they want to.
