INDICES

Indices are a measure of a section of shares in the stock market. Indices are created by combining the value of several stocks to create one aggregate value. Indices are either region-based or sector-based.

Major financial indices include the Dow Jones Industrial Average, S&P 500, FTSE 100, CAC 40, and Dax 30. The Dow Jones Index, for example, represents 30 large publically-listed companies traded on the New York Stock Exchange. The FTSE100 index represents 100 companies listed on the London Stock Exchange with the highest market capitalization, while the S&P 500 represents a broad range of 500 US companies. The index itself represents the value of a group of stocks from one country and shows the overall, current, and historical performance of that stock index. There are many types of indices available to trade at spot price or through forward trading.