Lots and Contracts in Trading Indices
Stock indices are traded in lots; these lots are made up of a number of units of a particular stock index.
For example the 1 lot of AUS200Cash Index is made up of AUD 7,000 and for this 1 lot one point movement in the stock index value is equal to AUD 0.1; However with leverage of 100:1 a trader only needs AUD 70 as their margin or capital so as to open 1 lot of AUS200Cash Index.
Leverage for those who do not know is trading on borrowed capital while using very little of your own capital as security. For example leverage 100:1 means that a trader borrows $100 dollars for every $1 dollar of their own. Therefore if a trader has $10,000 dollars and uses leverage 100:1, meaning that the trader now borrows $100 dollars for every $1 dollar that they have - they will now have control of $1,000,000 total capital to invest - that is $10,000*100= $1,000,000. This leverage is what makes stock index attractive to most online traders as traders obtain more capital to invest with once they employ leverage.
The leverage for each of the 14 indices is shown below along with the margin requirements and profit per 1 point movement in the stock index instruments.
Specifications of Indices
The specifications of the stock index provided for trading are shown below:
Australia ASX 200
Symbol - AUS200Cash
Pip (1 Point) - 0.1
Pip Value - AUD 0.1
1 Lot Units - AUD 7,000
Margin per Lot - AUD 70
EU EURO STOXX
Symbol - EU50Cash
Pip (1 Point) - 0.1
Pip Value - € 0.1
1 Lot Units - € 4,000
Margin per Lot - € 40
France CAC 40
Symbol - FRA40Cash
Pip (1 Point) - 0.1
Pip Value - € 0.1
1 Lot Units - € 4,000
Margin per Lot - € 40
Germany DAX 30
Symbol - GER30Cash
Pip (1 Point) - 0.1
Pip Value - € 0.1
1 Lot Units - € 8,500
Margin per Lot - € 85
Hong Kong Hang Seng 50
Symbol - HK50Cash
Pip (1 Point) - 1
Pip Value - HKD 1
1 Lot Units - HKD 45,000
Margin per Lot - HKD 450
Italy FTSE MIB 40
Symbol - IT40Cash
Pip (1 Point) - 1
Pip Value - € 1
1 Lot Units - € 4,000
Margin per Lot - € 250
Japan Nikkei 225
Symbol - JP225Cash
Pip (1 Point) - 1
Pip Value - JPY 1
1 Lot Units - JPY 9,000
Margin per Lot - JPY 90
Netherlands AEX 25
Symbol - NETH25Cash
Pip (1 Point) - 0.1
Pip Value - € 0.1
1 Lot Units - € 500
Margin per Lot - € 5
Spain IBEX 35
Symbol - SPAIN35Cash
Pip (1 Point) - 1
Pip Value - € 1
1 Lot Units - € 14,000
Margin per Lot - € 140
Switzerland SMI 20
Symbol - SWI20Cash
Pip (1 Point) - 0.5
Pip Value - CHF 0.5
1 Lot Units - CHF 10,000
Margin per Lot - CHF 100
UK FTSE 100
Symbol - UK100Cash
Pip (1 Point) - 0.1
Pip Value - £ 0.1
1 Lot Units - £7,000
Margin per Lot - £70
USA S&5 500
Symbol - US100Cash
Pip (1 Point) - 0.1
Pip Value - $ 0.1
1 Lot Units - $3,000
Margin per Lot - $30
USA NASDAQ 100
Symbol - US30Cash
Pip (1 Point) - 0.5
Pip Value - $ 0.5
1 Lot Units - $15,000
Margin per Lot - $150
USA Dow Jones 30
Symbol - US500Cash
Pip (1 Point) - 0.1
Pip Value - $ 0.1
1 Lot Units - $1,200
Margin per Lot - $12
Please note these instruments are quoted in 5 decimal points and therefore when trading note that the last point represents a fraction of a point.
For example if GER30 is quoted at 11645.20, the last point represents a fraction of a point, the point in this case is the digit 2, and because for GER30 1 Point equals € 0.1 to make profit of € 1, the price will have to move 10 points that is 11646.20.
The margin is the amount of capital that you will put down so as to transact one lot of that financial instrument.
Each stock index is based on a different currency; therefore there is no standard lot for these stock index. In addition the profit from each stock index is calculated in the currency of the economy that it represents - therefore you have to factor the exchange rate in relation to the dollar when calculating the profits.
