Description

Index trading is a popular way for traders to gain exposure to financial markets without having to invest in individual company stocks, bonds, commodities or other assets directly.

Those who are new to financial markets often start with index trading, meaning they trade an index-tracking fund or a basket of shares, instead of buying and selling individual company stocks.

By tracking the performance of a large group of shares, a stock index aims to reflect the state of a broader market, for example, the stock market of a country or a specific sector. This means that indices tend to be diversified.