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 (LSE). Trading indices enables you to get exposure to an entire economy or sector at once, while only having to open a single position. For optimal trading explore our Best Stock Indices Platform for comprehensive and efficient trading options.
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Most stock market indices are calculated according to the market capitalisation of their component companies. 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 trading with leverage, you should remember that your profit or loss is calculated using the entire position size, not just the initial margin used to open it. This means that while leverage can magnify profits, it can also amplify losses.
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