Trading UK sector indices
Sector indices explained
Our UK sector indices
How to trade indices
If you believe that an Index such as the FTSE 100 will rise, you can place a buy trade on City Index’s equivalent market, the UK 100.
If the prices rise, you will make a profit for every point that the index rises. If the market falls, then you will make a loss for every point the index moves against you. Our trading platform tells you in real-time how much profit or loss you are making.
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Sector indices FAQ
What are sector indices?
Sector indices are a basket of stocks within the same market segment or industry. Sector indices represent the performance of the broader market, enabling you to speculate on broader trends without taking multiple positions.
Sector indices are also commonly used as a benchmark to measure the performance of individual companies against the average.
With City Index, you can trade 14 major sector indices including:
Learn more about indices trading here.
How do sector indices work?
Sector indices work in the same way as other indices, by creating an index value by adding up the market capitalisations or the share price values of all the constituents and dividing the figure by that day’s divisor.
Each index will have different criteria for how it is constructed depending on what exposure it’s meant to give investors. For the most part, it’s usually dependent on how much of a company’s revenue is generated from activities within the industry.
For example, a mining stock would need proof of revenue being generated from the exploration of oil, mineral and natural gas deposits.
Learn more about how indices work here.