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.