What are indices, and why to trade them with WBS?
Take advantage of our mobile-friendly trading platform and place a trade from any place. You can count on top-notch support that never sleeps and a personal account manager who explains the different features of the platform and how to stay on top of your trading game by spotting the best trading opportunities.
And this is only the beginning. The thing that nobody else provides is the first protected from loss positions. This is our unique feature. It allows new traders to taste investing at no risk. They could only profit from their first trades. Keep this in mind while reading about indices.
What are indices? WBS explains
Imagine indices as a group, like a bouquet of shares if you like. The shares are combined by market sector, and every index measures the value of this market sector. For example, the Dow Jones index is made to measure the stock performance of U.S. companies in the technology industry.
Every index has a standardized methodology that is based on a specific metric. Every asset in every index has its weight, according to its importance on the market. The indices represent an overall change in the value of securities listed on a particular market.
The idea is to show the “mood” and the overall performance of the market. Thus, to give a bigger picture for investors. Online trading provides WBS is making online trading of indices secure and so easy. You have everything you need on the tip of your fingers. Take advantage of our mobile-friendly trading platform and place a trade from any place. You can count on top-notch support that never sleeps and a personal account manager who explains the different features of the platform and how to stay on top of your trading game by spotting the best trading opportunities.
And this is only the beginning. The thing that nobody else provides is the first protected from loss positions. This is our unique feature. It allows new traders to taste investing at no risk. They could only profit from their first trades. Keep this in mind while reading about indices. You have the opportunity to invest in indices because they are not traded on an exchange.
What are the different types of indices?
One could find hundreds of indices all over the globe. The main reason is fast info for the market activity from property to bonds and volatility — the main ways of grouping the assets by activity or by geographical criteria. One can assume that the most significant indices are generated by the most substantial companies or the ones with the largest capitalization. Indices could track the behavior of the small-capitalization organizations too.
One can classify the indices depending on the different ways the assets are weighted in the algorithm of every index. Market capitalization is the most common one. When we are talking about stocks – the companies enter the equation by the total value of the share that it has issued. Thus, the larger companies have more influence. The negative thing is that sometimes one company or sector could outweigh the other parts of the index.
The WBS list of the most popular indices and the way they are measured:
S&P 500 or simply S&P
This index represents the performance of the 500 largest companies in the U.S. It is weighted by market capitalization and the first 10 companies account for one quarter of the index.
Dow Jones Industrial Average or simply Dow
This index tracks how the 30 of the largest companies U.S. perform. It is not weighted by market capitalization. That is why it is not considered an adequate representation of the market situation than indices that gather a broader spectrum of companies and weigh them by market cap.
NASDAQ
This index tracks tech and internet related stocks. The overall number is more than 3000.
Russel 3000
This index tracks the 3000 largest by market cap in the U.S. These companies represent 98% of all American equity securities.
FTSE or Footsie
This index gauges the biggest 100 by market cap companies that are listed on the London Stock Exchange.
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What are the extra benefits of trading ETFs on the WBS platform?
Our platform provides you with protection from loss positions from which you can only gain money.
On top of that, you have training sessions and a personal account manager who will answer all your questions about the platform and trading itself.
