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Unlike Forex or commodity trading, index trading can appear to be quite an abstract concept. After all, in Forex we invest in currencies, in commodity trading we invest in commodities such as gold and silver, but what exactly are we investing in when it comes to index trading? An index is basically a figure that reflects the health of a market or an economy, so how can we actually invest in a number?
The answer lies in index mutual funds. When you invest in an index you are in fact investing in a fund that mirrors the movement of the index. What index options trading enables you to do is to invest in a very large segment of a market, or even an entire market itself. For example, in stock index trading, you have the option of investing in the NASDAQ, the Dow Jones, or the S&P 500, among other indices, all of which reflect different broad market properties. By investing for instance in the Dow, you would be investing in a significant portion of the industrial market.
Now eToro enables you to diversify your portfolio with index futures trading, alongside your other trading activity. Instead of searching for another index trading service, you can start trading indices online today with the same user friendly and social software that you’re already familiar with. Moreover eToro saves you the cost of expensive index trading courses and signal software. eToro’s free guides and exclusive trading course will help you learn about long and short term indices trading, index day trading, index arbitrage, index spread trading, and tranche trading strategies. And our top index traders on eToro OpenBook can teach you their own time-tested techniques, which you can then copy automatically using the eToro Copy Trader. Your personal account manager will also be more than happy to give you an insider look at index trading and help you develop and stick to your own index trading strategy.