INDEXES

Stock market indices are a basket of countries’ stocks and show the general condition of the relevant stock market and therefore the financial situation of the relevant country. By trading in stock market indices, you are investing in whether the economy of the relevant country will get better or worse.

FORBEX offers CFD services with competitive spread rates and a fast trading platform on 11 index contracts, including many leading stock market indices such as Dow Jones 30, Frankfurt Dax, Japan Nikkei 225, SP500 Index. CFD is the abbreviation of the words Contracts for Difference and is a financial derivative product that we can translate into Turkish as contracts for difference.

Before explaining CFD, we should focus on the concept of derivative products. Financial products developed by indexing spot market products are called derivative products. It is usually done at a later date, subject to certain conditions. The financial products from which derivative products are derived are called underlying assets. Therefore, the performance of derivative products is directly related to the performance of the underlying asset.

CFD is simply called contracts for difference. It works with the logic of a compromise between the seller and the buyer on the price difference. The seller undertakes to pay the difference between the price of the underlying asset at the end of a certain maturity and the price at the time the contract is made. However, contracts for difference have improved over time and have become capable of following the spot price without being based on a certain maturity. Thus, intrinsic value-free CFDs track the spot price of a particular underlying asset (say, Google stock or DAX contract) exactly and offer the investor the opportunity to benefit from spot price movements.

Which indices can you trade?

There is no specified contract size, maturity, etc. for CFDs and difference contracts. Therefore, each brokerage firm can create its own CFDs or request the price provider to create them. In contracts for difference, the difference between the buying price and the selling price becomes your profit. For example, when you buy 100 DAX CFDs, you do not physically buy the contract, but you are involved in the price movement.

Its calculation is as follows. Let’s assume that the investor bought 10 Dax contracts at 10000 and sold them at 10100. It will have a gain of (10100-10000)*10. Since the Dax Index is priced in EUR, the investor has a gain of 1,000 EUR in this transaction. You can perform this transaction at BalansFX with a principal of just over 2,000 EUR.

Why should you invest in the index?

FORBEX offers you a unique trading experience.

– No Expiration

– Commission-Free Transaction Option

– Competitive Spreads

– STP Solutions