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Building your own investment portfolio requires much skill and experience, but there’s a much simpler option: you can trade indices instead. These financial instruments serve as an entire basket of stocks, bonds, or other securities, chosen based on certain rules. In this Traders Union article, we explain the basics of how these instruments work and give you a brief overview of the top 3 best brokers who will allow you to trade indices.
What are indices?
Indices are trading instruments that include numerous other securities at once. Most of the time, these instruments are based on stocks, but you can also find indices for bonds, commodities, or currencies, too. The most popular indices consist of the most important stocks of big companies: for example, the FTSE 100 represents the top 100 stocks on the London Stock Exchange. Such indices are often used as benchmarks that allow you to estimate the performance of entire markets and compare it with what your own portfolio shows.
Indices are very convenient and potentially profitable trading tools, but not every broker supports them and allows you to trade them. That’s why you should pay attention to the trading conditions and asset variety of any broker you’re planning to choose. Let’s take a closer look at the list of the top 3 brokers for trading indices.
One of the leading international brokers, eToro is mostly known for its great copy trading features, but it’s also very convenient for active trading. The broker is regulated by CySEC and FCA, so you can be sure your funds are safe with it. The minimum deposit is $200, and the leverage goes up to 30:1. The broker also has a training section to help novice traders learn the basics.
AvaTrade is a well-known international broker from Dublin, Ireland. It’s a well-regulated broker with an impressive range of available trading instruments: Forex pairs, commodities, indices, bonds, and even certain cryptocurrencies. The minimum deposit here is $100, and the leverage can reach 400:1. There is an extensive training program for novices here, and you can use a demo account for practice.
Pepperstone is another reputable broker from Australia. It’s known for its quick order execution, lots of available CFDs on various assets, and relatively low fees. The minimum deposit is $200, and you can use leverage rates of up to 500:1.