Saxo Group
Summary: With FX markets falling flat and trading opportunities drying up, find out how equity index CFDs could help get your portfolio back on track.
Historical figures. Past performance is not a reliable indicator of future results.
Equities offer logical step for FX traders
With equities displaying higher volatility and strong performance in recent years, you could conclude that they offer a more attractive trading environment than FX. And while switching from pure FX trading to incorporate equities may seem like a sea change, it’s actually not as cumbersome as you might think.
In fact, an easy transition for any FX trader would be to start trading equity index CFDs.
What are equity index CFDs?
An equity index CFD is a derivative product that enables you to speculate on the performance of an entire stock market index, rather than buying individual shares. For example, with just one CFD trade, you can gain exposure to the performance of the whole S&P 500, or any other index of your choice.
When you trade an index CFD, you’re essentially agreeing to exchange the difference in price of an index from one time period to another. And as a CFD is a derivative, you can go both long and short – enabling you to profit from an index both rising and falling in value.
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Similarities between FX trading and index CFDs
Transitioning from FX to index CFDs with Saxo should be relatively straightforward, as the two products share many similarities. For example:
Beyond that, if you rely on technical analysis to trade FX, you should find it easy to trade index CFDs as well. This is because you’ll be looking for similar chart patterns and be able to apply the same technical principles to find trade opportunities. More fundamental-focused traders will be pleased to hear that macroeconomic factors, such as interest rate moves, affect both products, which should help make the switch between the two relatively seamless.
Furthermore, you needn’t worry about liquidity should you move away from FX. Saxo derives all its index-tracking CFDs from the volume in the futures market, meaning they’re also highly liquid products. The table below provides a more detailed comparison of the two instruments when trading them with Saxo.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
