Trading Stock Indexes

If you are a new trader that is wondering how you can trade a stock index like the Nasdaq or the FTSE 100 ... the answer is that you can't. The stock indexes that we are all familiar with, and that are reported in the financial news, cannot actually be traded directly.

The stock indexes are actually traded using other markets that are derivatives of (i.e. are based upon) the underlying stock indexes. These markets are the stock index futures and options markets, such as the NQ futures market for the Nasdaq stock index, and the Z futures market for the FTSE 100 stock index.

Further information about trading the stock indexes via futures and options markets, along with a discussion of how why you might want to chart the stock index but trade the futures and options market, is available in my trading stock indexes article.