Here you will find what we consider to be the best indices brokers, based on thousands of hours of detailed research, testing and analysis across hundreds of online brokers. Upon completion of each of our broker reviews, the trading brokers team has assigned each indices broker with a rating, and displayed our best indices brokers on this page.
FCA, CFTC, NFA, BaFin, FINMA, ASIC, FMA, MAS, FSA, FSCA, DFSA, JFSA, METI, MAFF
Min $250 Deposit
Some of the most important factors that contribute towards a good broker for indices trading have been considered including the regulatory authority, trading platforms, trading instruments, trading tools, fees, spreads, execution speeds, account types, deposit/withdrawal options, leverage, minimum deposit requirement, educational resources, customer support and more.
Having the best indices brokers based on our findings listed in one place can help traders save time when identifying the best indices brokerages according to their own individual trading needs.
Each of the brokers we have chosen have undergone and passed our stringent broker reviews with flying colours, based on what the trading brokers team consider to be amongst some of the most important considerations. These brokers are well-established within the online brokerage industry, providing top indices trading services to traders across the globe.
Following on from our list of the best brokers for trading indices, we will now look at what indices trading is and some of the most important factors to consider when looking for a indices broker.
Indices are a measurement of the price performance of a group of shares from an exchange. For example, the FTSE 100 tracks the 100 largest companies on the London Stock Exchange. Trading indices enables you to get exposure to an entire economy or sector at once, while only having to open a single position.
There are indices for almost every conceivable sector of the economy and stock market. Many investors are familiar with these indices through index funds and exchange-traded funds whose investment objectives are to track the performance of a particular index. Some of the most widely followed indexes include:
The three most popular stock indexes for tracking the performance of the U.S. market are the Dow Jones Industrial Average (DJIA), S&P 500 Index and Nasdaq Composite Index.
These well-known Indices are essentially baskets of individual Shares which are often ranked by independent institutions like major banks or specialist companies like Standard & Poor’s, the FTSE Group and Deutsche Börse.
It is worth keeping in mind that major shifts in the fortune of a single big company which is part of a wider index can have a potentially disproportionate impact on its performance.
Indices trading means that you are taking a position on a stock index – which is measure of the performance of several different companies. Indices trading can be a way to get exposure to an entire sector or economy at once, without having to open positions on lots of different shares.
One of the most popular way to trade indices is via CFDs, also known as Contracts for Difference. These financial instruments allow traders to profit both from rising and failing markets.
CFD index traders would open long (buy) positions, if they think an index will rise or short (sell) positions if they thought that the index will fall. The difference in price between the entry and exit price is the traders realised profit or loss, excluding any broker commission and fees.
For example, a trader could place a buy order on the S&P 500. If the price of the S&P 500 index goes up, when the trader comes to sell, they will earn the difference between the buy and sell price. If the price of the S&P 500 index goes down, the trader pays the difference and makes a loss.
Some choose to take quick intraday trading opportunities, others prefer short-term swing trading methods, while others prefer long-time frames lasting weeks or even months. You should trade indices in a way that meets your own individual trading style and goals.
An indices broker is a firm or an individual who executes orders to buy or sell indices on behalf of the clients and charges them a commission fee. A firm or individual who trades for their own account is called a trader. Indices can be on spot markets, futures contracts, options contracts, spread bets, CFDs (contracts for differences) and ETFs (exchange-traded funds).
Indices trading is a popular product for some traders for a variety of reasons. These include:
Trading global Indices with a broker allows you to go both long and short on price movements in major Indices from the UK, US, Asia, Australasia and Europe.
Trading indices is a balanced way to trade on the world’s top financial markets without having to analyse the performance of an individual company stock.
You’ll also benefit from market movement across not just a single sector, but a wide variety of different types of companies, providing greater opportunity as well as potentially lowering the risk of exposure to extreme volatility.
There are various factors worth considering if you are looking for a indices broker to trade online with. In this section, we will cover what we consider to be some of the most important factors that you need to be aware of when choosing a suitable indices broker for your own individual needs.
If you are looking for a broker to trade indices online with, then regulation should really be one of the first things that you look for. The trading brokers review team believe regulation to be very important as it can give traders some protection in the case something was to go wrong. Regulated brokers must follow strict rules and procedures that are put in place to protect investors. Without regulation, there may be no help should the worst happen.
There are approximately 5,000 U.S. indexes. The three most widely followed indexes in the U.S. are the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite. The Wilshire 5000 includes all the stocks from the U.S. stock market.
There are approximately 70 times more stock market indices than listed stocks in the world. There are nearly 3.3 million stock market indices around the world, according to research from the Index Industry Association (IIA).
If you have a particular index in mind, you will need to ensure that the broker you are considering has that index available to trade. The more indices there are, the more choice you will have if you wish to branch out in the future.
Brokers will often charge a commission fee for processing your indices trades through their platform. There may also be accounting fees and inactivity fees. It is important to be aware of all the broker fees and compare brokers to make sure they are providing good value.
To trade indices online, you will need an indices trading platform which the indices broker will provide you with. There are various desktop, web and trading apps available, some more user-friendly than others. Each platform will have a choose of trading tools, features and functionalities. If you are already familiar with a specific trading platform, you may wish to check that the broker provides it. Alternatively, you can opt for a popular and user-friendly indices trading platform such as MetaTrader or cTrader.
In finance, leverage refers to the act of magnifying positions in the indices market through the use of borrowed capital. You have to qualify for a margin account, but when you do, you’re able to use leverage (margin) to get into indices trades. Leveraged products, such as indices CFDs, magnify your potential profit but also your potential loss.
For example, if you had an account balance of $4,000 and leverage of 1:5, you would be able to take a position size of $20,000 ($4,000 x 5 = $20,000).
Whilst this does mean that you can control a position size larger than you would have been able to without leverage, it also means the risk is significantly greater. It is imperative that you have a clear understanding of leverage and how it works before trading with leveraged positions.
The best indices brokers should have a generous selection of educational resources such as trading guides, tutorial videos, webinars, eBooks, quizzes and more. These can help you to learn more about trading indices online and to help familiarise yourself with the brokers products and services. We are a big advocate of brokers who support informed trading.
Most indices platforms will have an array of built-in trading tools to assist with their daily trading activities and thorough market analysis. However, if you require any additional tools, it may be worth checking that they are provided by the broker. Tools can include economic calendars and earning reports to keep up to date with the latest index news, which can be used as part of a fundamental analysis. Other trading tools may include trade calculators, trading signals, market alerts and more.
Each indices broker will have its own minimum deposit policy so check that you can meet this requirement. You may also need to provide some personal information in order to pass the brokers KYC and AML procedures. The sign-up process can be quicker at some brokers, especially if all of it is conducted online. During the sign-up process it is very important to make sure that you read all of the brokers terms and conditions, only proceeding if you understand and agree with them.
Indices brokers can have a variety of different account funding options in order for traders to make deposits and withdrawals to and from their trading account. You should make sure that the broker has a convenient funding options for you along with the time taken and fees involved. Common broker payment methods can include wire transfer, credit/debit card whereas some brokers will offer online payment methods such as Neteller, PayPal and Skrill.
There are indices brokers located throughout the globe. Some will offer email and telephone support whereas others will also offer live chat support. You want to be able to contact the broker at a time and via a method that suits you. Therefore, it can be important to check where the brokers’ offices are located, what times they are available and how they can be reached. You could test their response time and quality prior to opening an account.
Now that you have had a brief overview of what indices are and what to look for when choosing an indices broker, you may be considering opening an online trading account to trade indices online. To do so, you will need to choose a indices broker, follow the account opening process and you will then be able to start trading indices online through one of their indices trading platforms.