Indexes or indices as named differently are a group of shares which belong to the same industry. For example Nasdaq is combined by the 100 top tech companies. There is no physical asset to own while trading indices, this is why they are traded through derivatives like CFDs.

Many people think that it is needed more capital to trade indices that is needed to trade other assets. Well, that is not true. Trading indices is cheaper compared to trading the stocks individually. You are exposing your capital to a wider market, a sector of the economy, which raises your chances to generate more profits.

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