Trading and Investing in Indices

A stock market index is a group of stocks or companies that are a part of a stock exchange. It can also be referred to a selected group of companies that are categorized as per their market value, ranking, size of the company, preference, consistency in business or profitability.

FTSE 100 is power house of the most influential companies listed on the London Stock Exchange (LSE). As the name suggests this group consists of 100 companies which are selected on basis of their market capital. To simplify it, this is a group of the top 100 shares to be traded on the LSE.

In terms of defining this group, FTSE 100 is also generally referred to as the “footsie” and is one of the most preferred and widely traded indices all over the world.

The DOW is a stock market index which is listed on the New York Stock Exchange and the NASDAQ. It is referred to with many names DOW JONES Industrial Average, DOW 30 or simply just DOW.

The DAX is an index or a group of the 30 most powerful stocks listed on the Frankfurt Stock Exchange in Germany. The DAX is also referred to as the Deutscher Aktien Index and was incorporated on the 30th of December 1987.