Stock Indices

An index is an average price of shares that are grouped together. Trading stock indices enables you to take advantage of broad market movements in one trade, rather than having to undertake a complex series of trades on a number of individual shares. Stock indexes can be affected by a range of market factors including performance of other indices.

Asian Stock Indices

Monex provides its clients with a wide range of stock indices, including the Nikkei225, Hangseng and KOSPIT200. The Nikkei225 is a stock index for the Tokyo Stock Exchange (TSE), incorporating 225 major companies. The Hangseng Index (HSI) is the primary stock index of Hong Kong Exchanges and Clearing (HKEX) and comprises 45 major companies. KOSPI 200 is one of the most active futures in the world; consisting of 200 companies traded on the Korea Stock Exchange. The futures contract for all three indices is traded under the Alternative Trading System (SPA), allowing participants to trade with minimal capital in a very liquid market. Below are the brief specifications of the three major Asian stock indices:

Japan Stock Index:
Nikkei225 

  • Reference month: March, June, September, December (per 3 months)
  • Size per point: $5 and $3

Hong Kong Stock Index:
Hangseng 

  • Reference month: January-December (per month)
  • Size per point: $5 

Korea Stock Index:
KOSPI200 

  • Reference month: March, June, September, December (per 3 months)
  • Size per point: $5 and $3.5  

Advantages 

  • Less capital investment required as there is no need to purchase a mutual fund or a barrage of stocks.
  • The ability to short sell.
  • High liquidity with instant execution for both buy and sell orders.
  • An ideal means for portfolio diversification and hedging.
  • Lower volatility and more stability in comparison to individual stocks.
  • Online trading via the Monex Trader platform.

Illustration

Assume that you are expecting the price of the Hangseng Index to fall. The Hangseng is currently at 21,800. You sell 1 lot of index at 21,800. The index actually falls and you liquidate your position at the price of 21.700.
Your profit or loss will be calculated as below:
= (Selling price – Buying price) x Size per point x Lot
= (21,800 – 21,700) x $5 x 1 = $500*

* The calculation above was made as an illustration only. Transaction costs and commission fees are excluded. Results may vary depending on the direction of the price movement.

United States Stock Indices

The three major stock indices of the United States are the Dow Jones Industrial Average (DJIA), NASDAQ100 and S&P 500. The DJIA represents an average of 30 large and go-public companies. The S&P 500 is a bigger basket of stock indexes — based on 500 large companies, it provides an accurate proxy for a diversified equity portfolio. The NASDAQ (National Association of Dealers Automated Quotations System) comprises 100 of the largest domestic, non-financial common stocks listed on the Nasdaq Stock Market. The futures contract for all three indices is traded under the Alternative Trading System (SPA), allowing all parties to make deals with smaller capital in a very liquid market. Below are the brief specifications of the three major United States stock indices: 

DJIA (DJC05)

  • Reference month: March, June, September, December (per 3 months)
  • Size per point: $5 

NASDAQ (NQC20)

  • Reference month: March, June, September, December (per 3 months)
  • Size per point: $20

S&P (SPC50)

  • Reference month: March, June, September, December (per 3 months)
  • Size per point: $50

 Advantages 

  • Less capital investment required as there is no need to purchase a mutual fund or a barrage of stocks.
  • The ability to short sell.
  • High liquidity with instant execution for both buy and sell orders.
  • An ideal means for portfolio diversification and hedging.
  • Lower volatility and more stablility in comparison to individual stocks.
  • Online trading via the Monex Trader platform.

Illustration

Assume that you are expecting the Dow Jones Industrial Average (DJIA) to rise. You buy 1 lot of DJIA (#DJ5) at 11,000. A month later, the DJIA actually rises and you liquidate your position at 11,200.
Your profit or loss will be calculated as per below:
= (Selling price – Buying price) x Size per point x Lot
= (11,200 – 11,000) x $5 x 1 = $1,000*

* The calculation above was made as an illustration only. Transaction costs and commission fees are excluded. Results may vary depending on the direction of the price movement.

European Stock Indices

European stock indices have gained more attention in recent years. Developments in Europe tend to have a global impact and London is one of the world's biggest financial hubs. The European stock indices provided by Monex are the FTSE100 based in the UK and the DAX futures based in Germany — both of which are traded under the Alternative Trading System (SPA). The FTSE100 is a share index of the 100 most highly capitalized UK companies listed on the London Stock Exchange (LSE) and the DAX is a blue chip stock market index consisting of 30 major German companies trading on the Frankfurt Stock Exchange. The futures trading enables participants to execute transactions with limited capital in a very liquid market.  

FTSE100 (FTC10)    

  • Reference month: March, June, September, December (per 3 months)
  • Size per point: £10  

DAX30 (DXC25)

  • Reference month: March, June, September, December (per 3 months)
  • Size per point: €25    

Advantages 

  • Less capital investment required as there is no need to purchase a mutual fund or a barrage of stocks.
  • The ability to short sell.
  • High liquidity with instant execution for both buy and sell orders.
  • An ideal means for portfolio diversification and hedging.
  • Lower volatility and more stablility in comparison to individual stocks.
  • Online trading via the Monex Trader platform.

Illustration

Assuming that you are expecting the FTSE100 index to strengthen. You buy 2 lots of FTC10UD at 5,800. The price actually rises the next day and you liquidate your position at 5,900.
Your profit or loss will be calculated as below:
= (Selling price – Buying price) x Size per point x Lot
= (5,900 – 5,800) x £10 x 2 = £2,000*

* The calculation above was made as an illustration only. Transaction costs and commission fees are excluded. Results may vary depending on the direction of the price movement.