INDICES

World indices are indicators of price changes for a certain group of securities. They function like a “basket” of shares united by a common basis. Trading indices can be compared to opening positions on the courses of several dozen stocks at once.

For example, if oil prices rise, it is logical to expect an increase in the shares of all the oil companies. However, different stocks grow at different speeds; some may not respond to this news at all. In this case, spot indexing helps traders understand how an overall market segment is trending without having to assess the positions of lots of different companies.