New trading instruments: [DJI30], [SP500], [NQ100], [FTSE100], [DAX30], [CAC40], [JP225] 2009.04.21

Abril 21, 2009 10:55

Dear Customers,

We are happy to introduce new CFD contracts – 7 stock indices – that will be made available for trading on live accounts in upcoming days. You can begin your practical training with them right now on Admiral-Demo server.

The 7 new indices are: [DJI30], [SP500], [NQ100], [FTSE100], [DAX30], [CAC40] and [JP225].

Index represents a weighted average price evolution of a certain pack of shares which are traded at stock exchanges (e.g. New York Stock Exchange or London Stock Exchange). Unlike futures contracts, stock indices do not expire, so you can hold your positions as long as you want. Buying or selling a stock index CFD is similar to buying or selling its all constituent shares. If you trade stock indices, there is no need to monitor corporate affairs of any particular company. Certain shares may fluctuate randomly or even move against the market, but the stock index will clearly show you the prevailing trend. Therefore it is much easier to predict index movements rather than fluctuations of any separate shares, as the index represents the entire market or its sector and is naturally influenced by fundamental news and macroeconomic data releases. Moreover, you are not only able to buy index CFDs, but you can eventually sell them and take an opportunity from the bearish market. So your gains during the world's economy recession can be as high as during an economic boom. This is a powerful investment tool either for beginning speculators and for professionals, and of course, all the standard tools of MetaTrader 4 terminal are also available in the index trading, including all types of pending orders and programmable trading robots (Expert Advisors). Just like in Forex currency market!

We offer you premium conditions on index CFDs. The leverage on all indices is 1:50 (i.e. only 2% from the market price are required as a margin collateral). Market is open for business 24 hours a day, 5 days a week, with small breaks specified by exchanges. The profit/loss calculation is simple and clear: for 1.0 Lot trade, 1.0 full index point is always equal to 1.0 units of the contract's base currency. You will find basic trading examples further in this article.

Specifications and descriptions of the new trading instruments are provided below.

Please note that the given specifications are subject to change during the public test on Admiral-Demo server as we hope to reveal the optimum values of all trading parameters that will perfectly meet expectations of our Clients. Please post your suggestions in our forum or e-mail to support@fxservice.com

  1. [DJI30]. The Dow Jones Industrial Average Index is computed from the stock prices of the 30 largest and most widely held public companies in the United States, including Boeing, Intel, Microsoft, Coca-Cola, McDonald's etc.

    Symbol: [DJI30]
    Description: Dow Jones Index CFD, cash (USD)
    Contract size (1.00 Lot): 1
    Step (Lots): 1
    Margin: 2%
    Spread: 2 index points 08:35-15:00 Chicago time; 4 index points other times
    Index point value (1.00 Lot): 1 USD
    Limit/Stop Level: 4 index points
    Tick: 1
    SWAP (Long): USD -1.0
    SWAP (Short): USD -1.0
    Trading hours: 24h, with a 15 minutes break (15:15-15:30 Chicago time) and 30 minutes break (16:30-17:00 Chicago time). Trading opens 17:00, Sunday and closes 15:00, Friday (Chicago time)
    Comment: Does not expire


  2. [SP500]. The Standard & Poor's 500 is a value weighted index of the prices of 500 large capitalization common stocks actively traded in the United States. The stocks included in the S&P 500 are those companies that trade on either of the two largest American stock markets, the New York Stock Exchange (NYSE) and NASDAQ. The index is considered a bellwether for the US economy.

    Symbol: [SP500]
    Description: Standard Poor's Index CFD, cash (USD)
    Contract size (1.00 Lot): 1
    Step (Lots): 1
    Margin: 2%
    Spread: 0.5 index points
    Index point value (1.00 Lot): 1 USD
    Limit/Stop Level: 1 index point
    Tick: 0.1
    SWAP (Long): USD -1.0
    SWAP (Short): USD -1.0
    Trading hours: 24h, with a 15 minutes break (15:15-15:30 Chicago time) and 30 minutes break (16:30-17:00 Chicago time). Trading opens 17:00, Sunday and closes 15:00, Friday (Chicago time)
    Comment: Does not expire


  3. [NQ100]. The NASDAQ 100 is a stock index of the 100 largest domestic and international IT, electronics, biotechnology & telecommunications companies listed on the NASDAQ Stock Exchange (USA). It is a modified market value-weighted index. Such companies as Apple, Adobe, Microsoft, Google, Intel, nVidia etc. are components of the NASDAQ 100 index.

    Symbol: [NQ100]
    Description: NASDAQ100 Index CFD, cash (USD)
    Contract size (1.00 Lot): 1
    Step (Lots): 1
    Margin: 2%
    Spread: 2 index points
    Index point value (1.00 Lot): 1 USD
    Limit/Stop Level: 4 index points
    Tick: 0.1
    SWAP (Long): USD -1.0
    SWAP (Short): USD -1.0
    Trading hours: 24h, with a 15 minutes break (15:15-15:30 Chicago time) and 30 minutes break (16:30-17:00 Chicago time). Trading opens 17:00, Sunday and closes 15:00, Friday (Chicago time)
    Comment: Does not expire


  4. [FTSE100]. The Financial Times Stock Exchange 100 is a stock index of the 100 most highly capitalised UK companies listed on the London Stock Exchange. It is the most widely used index in the UK, which is frequently reported as a best measure of business prosperity in Western Europe. Includes such companies as Barclays, British Airways, Rolls-Royce Group, Thomson Reuters, Vodafone etc.

    Symbol: [FTSE100]
    Description: FTSE100 Index CFD, cash (GBP)
    Contract size (1.00 Lot): 1
    Step (Lots): 1
    Margin: 2%
    Spread: 1 index point (08:05-16:30 London time); 2 index points (16:35-21:00 London time); 6 index points (21:00-08:05 London time)
    Index point value (1.00 Lot): 1 GBP
    Limit/Stop Level: 2 index points
    Tick: 0.1
    SWAP (Long): GBP -1.0
    SWAP (Short): GBP -1.0
    Trading hours: 24h, with a 5 minutes break (16:35-16:30 London time). Trading opens 23:00, Sunday and closes 21:00, Friday (London time)
    Comment: Does not expire


  5. [DAX30]. The DAX (Deutscher Aktienindex) is a blue chip stock market index consisting of the 30 major German companies listed on the Frankfurt Stock Exchange. Includes such widely known brands as Adidas, BMW, Deutsche Bank, Lufthansa, Siemens and Volkswagen.

    Symbol: [DAX30]
    Description: DAX30 Index CFD, cash (EUR)
    Contract size (1.00 Lot): 1
    Step (Lots): 1
    Margin: 2%
    Spread: 1 index point (09:05-17:30 CET); 2 index points (17:35-22:00 CET); 10 index points (22:00-08:00 CET); 2 index points (08:00-09:05 CET)
    Index point value (1.00 Lot): 1 EUR
    Limit/Stop Level: 2 index points
    Tick: 0.1
    SWAP (Long): EUR -1.0
    SWAP (Short): EUR -1.0
    Trading hours: 24h, with a 5 minutes break (17:30-17:35 CET). Trading opens 00:00, Monday and closes 22:00, Friday (CET)
    Comment: Does not expire


  6. [CAC40]. The CAC 40 (Cotation Assistée en Continu) is a benchmark French stock market index. The index represents a capitalization-weighted measure of the 40 most significant values among the 100 highest market cap companies on the Euronext Paris Stock Exchange. Air France, BNP Paribas, Societe Generale, L'Oreal and Renault are among the CAC 40 components.

    Symbol: [CAC40]
    Description: CAC40 Index CFD, cash (EUR)
    Contract size (1.00 Lot): 1
    Step (Lots): 1
    Margin: 2%
    Spread: 1 index point (09:05-17:30 CET); 2 index points (17:35-22:00 CET); 6 index points (22:00-08:00 CET); 2 index points (08:00-09:05 CET)
    Index point value (1.00 Lot): 1 EUR
    Limit/Stop Level: 2 index points
    Tick: 0.1
    SWAP (Long): EUR -1.0
    SWAP (Short): EUR -1.0
    Trading hours: 24h, with a 5 minutes break (17:30-17:35 CET). Trading opens 00:00, Monday and closes 22:00, Friday (CET)
    Comment: Does not expire


  7. [JP225]. Nikkei 225 is a stock market index for the Tokyo Stock Exchange. It is a price-weighted average (the base currency unit is Yen). Currently, the Nikkei 225 is the most widely quoted index of Japanese equities, including such widely known brands as Honda, Nissan, Toyota, Nikon, Olympus, Hitachi and Panasonic.

    Symbol: [JP225]
    Description: NIKKEI225 Index CFD, cash (JPY)
    Contract size (1.00 Lot): 100
    Step (Lots): 1
    Margin: 2%
    Spread: 5 index points (09:05-15:00 JST); 10 index points other times
    Index point value (1.00 Lot): 100 JPY
    Limit/Stop Level: 50 index points
    Tick: 1
    SWAP (Long): JPY -100.0
    SWAP (Short): JPY -100.0
    Trading hours: 24h, with a 15 minutes break (15:15-15:30 Chicago time). Trading opens 23:00, Sunday and closes 21:00, Friday (London time)
    Comment: Does not expire


Further we will review some real examples of trading with the new instruments:

1. Buying [DJI30] index CFD

  • Initial conditions: funds on the deposit (trading account): 300 USD.
  • At 16:05 h. we take the decision to purchase 1 lot of [DJI30] (i.e. 1 contract for difference of Dow Jones Industrial Average Index) at the price of 7910 USD. Our margin requirements for index trading are 2% of the transaction size, so for the purchase of one lot it's necessary to have 7910*0.02 = 158.20 USD of free funds available on the trading account.
  • One index point (i.e. a change in the price of 1.0) is equal 1 USD of profit or loss for a trader when a volume of a trade is 1 Lot, as indicated in the [DJI30] specification.
  • The same day at 17:15 h. the index reaches a value of 7972. Let’s admit that the decision to take profit is made exactly in this point. It is possible to close a trading position manually, directly from the MetaTrader 4 terminal, but we also had the possibility to set the pending Take Profit order in advance, which would be executed automatically on the Admiral Markets Ltd. trading server at the indicated price.
  • The difference between the position’s closing price and opening price is 7972-7910 = 62 index points.
  • The profit earned equals 62*1 = 62 USD. So the total funds on the trading account after the position is closed: 300+62 = 362 USD.
2. Selling [FTSE100] index CFD

  • Initial conditions: funds on the deposit (trading account): 1500 USD.
  • At 11:25 h. we take the decision to purchase 5 lots of [FTSE100] (i.e. 5 contracts for difference of Financial Times Stock Exchange 100 Index) at the price of 3987.5 GBP. For opening of such position it’s not required to previously purchase the index CFD. Our margin requirements for index trading are 2% of the transaction size, so for the purchase of one lot it's necessary to have 3987.5*0.02*5 = 398.75 GBP.
  • For example, the Forex market rate of GBP/USD currency pair is currently equals 1.4992. Converting to USD currency, we will need 398.75*1.4992 = 597.81 USD of free funds available on the trading account in order to open the position.
  • One index point (i.e. a change in the price of 1.0) is equal 5 GBP of profit or loss for a trader when a volume of a trade is 5 Lots, as indicated in the [FTSE100] specification.
  • The same day at 13:10 h. the index reaches a value of 3965.0. Let’s admit that the decision to take profit is made exactly in this point. It is possible to close a trading position manually, directly from the MetaTrader 4 terminal, but we also had the possibility to set the pending Take Profit order in advance, which would be executed automatically on the Admiral Markets Ltd. trading server at the indicated price.
  • The difference between the position’s opening price and closing price is 3987.5-3965.0 = 22.5 index points.
  • The profit earned equals 22.5*5 = 112.5 GBP. For example, the Forex market rate of GBP/USD currency pair is currently equals 1.4933. Converting to USD currency, we have earned 112.5*1.4933 = 168 USD. The total funds on the trading account after the position is closed: 1500+168 = 1668 USD.
3. Buying US Dollar Index Future CFD (#DX)

  • Initial conditions: funds on the deposit (trading account): 500 USD.
  • At 11:55 h. we take the decision to purchase 1 lot of #DX (i.e. 100 contracts for difference of US Dollar Index Future) at the price of 84.958 USD. Our margin requirements for index trading are 2% of the transaction size, so for the purchase of one lot it's necessary to have 84.958*100*0.02 = 169.92 USD of free funds available on the trading account.
  • One point (i.e. a change in the price of 0.01) is equal 0.10 USD of profit or loss for a trader when a volume of a trade is 1 Lot, as indicated in the #DX specification.
  • The same day at 12:59 h. the index reaches a value of 85.450. Let’s admit that the decision to take profit is made exactly in this point. It is possible to close a trading position manually, directly from the MetaTrader 4 terminal, but we also had the possibility to set the pending Take Profit order in advance, which would be executed automatically on the Admiral Markets Ltd. trading server at the indicated price.
  • The difference between the position’s closing price and opening price is 85.450-84.958 = 0.492, i.e. 492 points.
  • The profit earned equals 492*0.10 = 49.20 USD. So the total funds on the trading account after the position is closed: 500+49.20 = 549.20 USD.


Advertencia de riesgo

Los CFDs son instrumentos complejos y tienen un alto riesgo de perder dinero rápidamente debido al apalancamiento. 83% de inversores minoristas pierden dinero cuando operan con CFDs con este proveedor. Debe considerar si entiende cómo funcionan los CFDs y si puede permitirse tomar este alto riesgo de perder su dinero.