Everyone has different financial goals which is why the choice of best index brokers can vary depending on your individual needs. We have kept this in mind and selected a variety of brokers that can cater to all types of investing and trading styles.
Take your position on over 80 indices with commission free indices trading on IG. Seize exclusive opportunities on more 24-hour indices than any other provider. Benefit from deep liquidity that increases the chance of your larger trades being accepted. Get spreads from 1 point on the FTSE 100, 1.2 on the Germany 40 and 0.4 on the US 500. Deal on the award-winning IG platform and mobile app. Go short or long to capitalise on falling or rising markets. IG offer over 30 more weekly trading hours than their nearest competitor, including weekend trading on key indices. Act on breaking news, macroeconomic events and earnings reports as they happen.
- 81 indices markets for CFD trading, and 69 indices markets for spread betting
- Trade indices on the best trading platforms
- Speculate on a group of shares for less than the cost of trading them individually
- Get exposure to an entire sector or economy at once
- Hedge against a drop in the value of your share portfolio
- Take long or short positions
- Superior liquidity for reliable execution speeds
- No commission and low spreads
IG Review Editor choice
AvaTrade offers one of the largest ranges of stock indices of any online broker, covering markets around the globe. Join AvaTrade for online index trading with competitive spreads, zero commission fees and reliably fast execution. AvaTrade’s selection of 20 Indices includes the most popular and frequently traded indices in the industry today: US500, Dow Jones, US_TECH100, FTSE 100, DJ EURO STOXX 50.
- Trade the leading US, European & Asian stock indices
- Go long or short – trade your view on the market
- A selection of powerful trading platforms including MetaTrader 4/5 platforms for desktop, tablet & mobile
- Trading Central and Guardian Angel add-ons
- Enjoy the security of trading with a globally regulated broker
- Outstanding multi-lingual client support
- Zero commission fees, tight spreads and rapid execution
AvaTrade Review Low fees
Gain exposure to the basket of instruments making up the index in just one trade. The world’s most popular Indices are available on all IC Markets trading platforms. IC Markets has a large range of Indices from around the world to choose from, including the Australian S&P 200 Index, UK FTSE 100 Index, US E-mini S&P 500 and US DJIA Index. Online CFD and futures-based indices are offered on both IC Markets MetaTrader 4, 5, and cTrader Platforms. IC Markets offers competitive spreads across all cash Indices, including the E-mini S&P 500 Index from 0.4 points, the FTSE 100 Index from 1 point, Xetra DAX Index from 1 point and S&P 200 Index from 1 point. In addition to Equity Indices, IC Markets also offers Futures Indices: ICE Dollar Index and VIX Index.
- 25 Indices to trade from
- Spreads as low as 0.4 pips
- Deep Liquidity
- No commissions
- MetaTrader 4, 5 and cTrader
IC Markets Review Best prices
With Pepperstone you can trade on the movement of major stock market indices around the world with razor sharp pricing, from multiple Tier 1 banks and Liquidity Providers, with competitive fixed spreads as low as 1 point on UK100, 0.9 on GER40. They charge no commission fees and have fast execution speeds. Top tier liquidity ensures you get all of your index’s trades filled in full, with no partial execution or requotes on market orders. You can trade all opportunities, with 24-hour pricing on major Indices like UK100, GER40 and US30 from Sunday night to Friday night.
- Go long or short on major global stock market indices
- Fast execution and no dealing desk intervention
- Trade confidently with a regulated provider and get protected
- Apply for your trading account in few minutes
- Award-winning customer support, available 24hours 5 days per week, and 18hours on weekends
Pepperstone Review Best value
XM Group offer cost-effective and direct access to the global equity markets. You can speculate on market uptrends and downtrends, going short or long according to market moves. There are over 20 stock indices available for trading with very competitive spreads from and no commission fees.
- Trade long and short on 20+ stock indices
- Suits both short and long-term trading strategies
- No extra fees apply
- $5 minimum deposit
- Free deposits and withdrawals
- Fast account opening process
Indices are a measurement of the price performance of a group of shares from an exchange. For example, the FTSE 100 tracks the 100 largest companies on the London Stock Exchange. Trading indices enables you to get exposure to an entire economy or sector at once, while only having to open a single position.
There are over 3 million stock indices in the world, according to the Index Industry Association. The S&P 500 (SPX), Dow Jones Industrial Average (DJI) and Nasdaq Composite (IXIC) are the world’s largest indices based on the market capitalization of their constituents. Some of the other most popular indices to trade include the FTSE 100, the DAX 30, and the Nikkei 225. There are approximately 5,000 U.S. indexes. The Wilshire 5000 includes all the stocks from the U.S. stock market.
Stock Market Indices give an insight into the overall trends of the capital markets and sentiment of the investors towards a particular stock or set of stocks in an industry. The calculation of the index value comes from the prices of the underlying holdings. This method gives greater weighting to larger cap companies, which means their performance will affect an index’s value more than lower cap companies. When some stocks increase in price and others come down, the index shows how much the stock market has gone up or down on average.
What Causes Stock Index Movement?
An index’s price movements are determined by the stocks it tracks. Industry news, earnings reports and political announcements will all play out across an index.
An index’s value changes as the prices of its constituent shares fluctuate, so it will mirror any general upward or downward trend in stocks. The factors that move indices are therefore essentially the same as those that influence individual shares.
An index’s price can be affected by a range of factors, including: Economic news – investor sentiment, central bank announcements, payroll reports or other economic events can affect underlying volatility, which can cause an index’s price to move.
It is worth bearing in mind too that major shifts in the fortune of a single big company which is part of a wider index can disproportionately impact on its performance.
Index trading is the trading of a basket of stocks that make up the index through a single instrument. Index trading is a popular way for investors to gain exposure to financial markets without having to research and invest in company stocks directly.
Indices traders speculate on price movements in stock indices like the FTSE 100, the Dow Jones and DAX. Trading global Indices with an online broker allows you to go both long and short on price movements in major Indices from the UK, US, Asia, Australasia and Europe.
Traders can benefit from market movement across not just a single sector, but a wide variety of different types of companies, providing greater opportunity as well as potentially lowering the risk of exposure to extreme volatility.
The advantage of trading indices over individual stocks, and using them in passive investment strategies, is that they offer exposure to an entire industry. Investors do not have to perform thorough research on individual company reports; they only need to take a bullish or bearish position, depending on the overall market sentiment.
Stock Index Investing
Index investing is a passive investment strategy that seeks to replicate the returns of a benchmark index. Investors achieve this goal by replicating specific indices such as a fixed income or equity index. One means of index investing is to purchase shares of exchange-traded funds that track an underlying benchmark index.
Indexing can offer greater diversification, as well as lower expenses and fees, than actively managed strategies. This is due to the fact that the holdings in an index investing portfolio do not change frequently. Therefore, the fund or portfolio does not incur heavy transaction costs.
If you are considering investing into and trading indices, you will need an indices broker. Once you have opened a brokerage account and deposited funds, you will then be able to access global indices using the provided trading platforms.
How to choose an Indices Broker
There are hundreds if not thousands of online brokers that offer indices trading and investing. It can be overwhelming to some people if they don’t know what they are looking for. Fret not, we have compiled a list of some of the key things to look for when identifying the best index brokers for you.
Ideally, the broker will be regulated by a top-tier regulatory authority. Strict regulation can give investors some protection and ensures the broker must operate within a set of rules.
The three most widely followed indexes in the U.S. are the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite. If you have an interest in a particular index, you may want to see if it is available to trade.
If you are interested in other financial instruments, we have the following guides:
You will need to pay your broker a fee for trading indices. This can include commissions, spreads, inactivity fees, funding fees and overnight fees. Shop around for a suitable broker with competitive fees. Generally speaking, the lower the trading fees, the more you could save in the long term.
You can trade indices through an trading platform provided by the broker. As you will be using it to conduct all of your trading activity, you will want to make sure it is user-friendly and available for desktop, web and mobile if you plan to access your account on the go. You could always open a risk-free demo account with a broker and trial the platform to see if it works for you.
If you are looking for an investment platform, please feel free to check out these free guides:
Trading tools can help with planning your trades and analysing the stock market index. Keep an eye out for what specialised tools the broker has on offer and if there are any additional costs involved.
If you are a beginner or just enjoy learning, see if the broker in question has any educational materials such as guides and videos. The best index brokers should also post market analysis to help clients stay up to date with the latest market movements.
Different brokers have different minimum deposit requirements. Check to make sure the broker has a deposit level that you feel comfortable with. As always, never risk more than you can afford to lose.
Consider what funding options are available. Wire transfer and card payment are common. However, if you want to use an e-wallet or cryptocurrency, you may have a more limited choice of broker. Make sure you check how long deposits and withdrawals take along with the costs involved, if any.
See how good the brokers support is. You could send them a message and think about how long it takes for them to respond and if they answered your question. We prefer brokers who offer 24/7 multi-lingual support via live chat. This way, we can contact them at any time.
Trading indices enables you to get exposure to an entire economy or sector with one single position, instead of opening multiple trades across several companies. When you are choosing an indices broker, look out for regulation, broker fees, trading platforms and tools, learning resources, funding methods and support. At the end of the day, choosing the best indices broker is your own decision as it depends on your unique needs.