What are Indices?
An index is a statistical measure used to represent the change in a particular market or part of a market. For example, the Dow Jones Industrial Average (DJIA) is one of many major world indices and is comprised of 30 market leading, high capitalisation stocks traded on the NYSE and NASDAQ that are deemed to represent the broader stock market and its performance. The Dow Jones Transportation Average (DJTA) is an index of the transportation sector as represented by stocks in that sector. It is worth noting that indices are comprised from an imaginary portfolio of the elements contained within them.
Financial managers and investors use indices to understand market movements and assess their own investment performance. Indices change from time to time as their composition changes and the weighting of the different components are adjusted.
Trading CFD Indices provides clients with exposure to all international equity markets and is an extremely effective hedging tool. NSFX Ltd. is well aware of the important role these instruments play in diversifying any portfolio. With access to all major world indices available including: NASDAQ, DAX, FTSE and the CAC, clients can profit from global market sentiment utilising NSFX’s market-leading trading platform.
Trading Indices with NSFX
NSFX Ltd. recognises that trading Indices is an integral part of many traders’ trading strategy. Consequently, NSFX provides clients with the best possible trading conditions to profit from index price movements, including:
- Fast execution and the tightest spreads
- Daily indices analysis
- Multiple platform trading capabilities (Web, desktop, mobile)
- Balanced leverage and exposure, 1:20, 5% of transaction value
- Trading flexibility – fixed spread or variable ECN spread
Note: Visit our dedicated page for real life foreign exchange trading examples.
Trading Indices at NSFX
The following table outlines Index trading parameters at NSFX.
|Instrument||Spread||*ECN Spread||Leverage||Contract Size||Min. Trade||ECN Min. Trade|
|AUS200||6||2||1:20||1 Contract||0.01 Lot||0.01 Lot|
|CAC40||3||1.3||1:20||1 Contract||0.01 Lot||0.01 Lot|
|DAX30||3||1.5||1.20||1 Contract||0.01 Lot||0.01 Lot|
|FTSE100||3||1.3||1:20||1 Contract||0.01 Lot||0.01 Lot|
|JPN225||22||8||1:20||1 Contract||0.01 Lot||0.01 Lot|
|USA100||3||1||1:20||1 Contract||0.01 Lot||0.01 Lot|
|USA30||4||3||1:20||1 Contract||0.01 Lot||0.01 Lot|
|USA500||2||1||1:20||1 Contract||0.01 Lot||0.01 Lot|
*These are averages of fluctuating spreads.
Note: Clients may choose to trade in the indices of all global stock markets, but margin requirements will be calculated according the base currency (USD, EUR, GBP) selected for the account by the client.
Index CFD Rollover (Swaps)
In both commodities and foreign exchange markets a rollover/swap, is the interest that is added or deducted in order to secure an open position overnight. Rollover/swap rates are calculated as the overnight interest rate differential between the two currencies on which the position is held comes due, depending on the position type (Buy (Long) / Sell (Short).
Note: All rollover fees for all CFDs including: ‘Gold’, ‘Crude-Oil’, ‘Silver’ and ‘Indices’ will be charged a 1% flat fee.
It is important to consider the following aspects of rollover/swap charges:
- Rollover/Swaps are charged on client’s forex accounts only on the positions kept open into the next forex trading day
- The rollover process begins at the end of the US market trading session
- The Index rates below are calculated and based on USD accounts per 1 Standard Lot
- Rollover/swaps are calculated and applied on every trading night. On Wednesday night rollover/swaps are charged at a triple rate (see explanation below)
Precious Metal Rollover/Swaps – Additional Information
At NSFX, rollovers are only dealt with on a ‘spot’ basis. This means that all positions are settled two business days from inception, as per market rules.
As a result, all positions that are open from 23:59:45GMT to 23:59:59GMT (Server time) are rolled over to a new value date. These trades are then charged or credited the relevant rollover as shown in the table above.
Note: When an open trade is rolled over from Wednesday to Thursday on trade, the new value date shifts to Monday of the next week. As a result, the rollover charge on Wednesday evenings will always be three times the value shown in the above table. In general, it should be understood that in the case of factoring in weekends and holidays, the rollover/swap is multiplied by the number of days of the rollover.
As with currency pair swaps, when commodity or index positions are held by clients overnight there is a rate charged as follows:
Long: Index value * Number of CFDs * (relevant interbank rate + 2.5%) * (Actual Number of days/360 or Actual Number of days/365)
Short: Index value * Number of CFDs * (relevant interbank rate – 2%) * (Actual Number of days/360 or Actual Number of days/365)
There will be a commission levied against each CFD trade equivalent to 0.05% of the nominal trade value, subject to a minimum fee detailed as follows:
|USA30, USA100, USA500||0.05%|
|CAC40, DAX30, ITA40, SPA35||0.05%|