AvaTrade Indices

There are millions of financial assets in which to invest in the world and tracking each one’s performance is virtually impossible so Indices measure a small sampling of the market that represents the whole; any change in price of an Index is proportional to changes in prices of stocks (or other securities) that comprise the Index. 

Investors can trade individual shares of stock (or other security) or trade Indices that measure the performance of a group of stocks (or other security).  Just as the performance of a company‘s stock is indicative of its overall financial status, the averages determined by a stock market Index are used to measure the global performance of an entire financial market or segment of the economy.  

Indices are groups of assets that are representative of a certain sector of the market (i.e. oil, Internet technology, etc.) or a market in its entirety (i.e. New York Stock Exchange).  An Index provides a statistical measure of the price (or value) fluctuations within that segment of the stock market which is represented by the Index.