The benefits of equity index CFDs in volatile markets
From the analysis above, you can see the majority of our most-profitable clients traded equity index CFDs to capitalise on the recent volatility. But what exactly is an equity index CFD and what are its benefits?
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.
Learn more here or try trading our 29 different equity index CFDs in the SaxoTraderGO demo.
The value of equity index CFDs can go down as well as up. Losses can exceed deposits on margin products. As with other complex products, including CFDs and FX, equity index CFDs come with a high risk of losing money rapidly due to leverage. In fact, 71% of our retail investors lose money when trading CFDs. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money.