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Index — definition & meaning

A basket of stocks tracked as a single number, like the S&P 500.

A stock index measures the combined value of a group of shares, such as the S&P 500 or FTSE 100, giving a snapshot of a whole market's direction.

You can't buy an index directly, but you can trade its movement through index CFDs, futures or ETFs. Indices are popular because they spread exposure across many companies at once.

The information on Trding.io is for general information only and is not investment advice. Trading involves a real risk of losing money, and most retail traders lose. Never trade money you cannot afford to lose.

Related terms

Stock (share)
A unit of ownership in a company.
CFD (contract for difference)
A leveraged contract to exchange the price change of an asset, without owning it.
ETF (exchange-traded fund)
A fund holding many assets that trades on an exchange like a share.
Futures
A standardised contract to buy or sell an asset at a set future date and price.
Forex (FX)
The global market for trading one currency against another.
Currency pair
Two currencies quoted together, showing the price of one in the other.

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