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Spot Indices
Spot Indices are usually linked to a particular region and each of them can estimate the state of economy in this region. If an index falls due to a decrease in the price of the companies' stocks included in this index, it indicates possible problems of the economy as a whole or partially.
Spot Indices advantages:
- High liquidity;
- Reduction of market risks through hedging;
- Spot Indices are perfect for speculative trading as this instrument is sensitive to economic news releases;
- Low margin requirements;
- Diversification of investment portfolio between different financial tools.
Specification of contracts:
| Instruments | Silver Account | Raw Spread Account |
|---|---|---|
| Spreads | ||
| SP500 | 3.60 | 0.75 |
| DJ30 | 5.50 | 2.50 |
| NAS100 | 6.80 | 1.20 |
| HK50 | 19 | 8 |
| JPN225 | 18 | 8 |
| GER30 | 5.50 | 2.10 |
| UK100 | 8 | 5 |
Spot Indices margin calculation:
The Magic Compass offers major market spot index contracts such as UK100, US500, FR40, GER30, JPN225, NAS100, US30 and HK50 for investors to trade. For JPN225, each 10 units is represented as 1 lot. All of the other stock indices are represented as 1 unit per lot.
It is known that JPN225 and US30 are quoted at 22026 and 25644.25 respectively, EURUSD is quoted at 1.13750, and GBPUSD is quoted at 1.27387.
Case example
- Case 1: Assume someone wants to buy 1 lot of JPN225 at the current price. What is the required margin?
- 1)If the currency of the account is in USD, the required margin is:1*62.25*1000/10=6225.00(USD)
- 2)If the currency of the account is in EUR, the required margin is:3112.5/1.13750=5472.53(EUR)
- 3)If the currency of the account is in GBP, the required margin is:1.27387=4886.68(GBP)
- Case 2:Assume someone wants to buy 1 lot of US30 at the current price. What is the required margin?
- 1)If the currency of the account is in USD, the required margin is: 1*25644.25*1/5=5128.85（USD）
- 2)If the currency of the account is in EUR, the required margin is: 1282.21/1.13750=4508.88（EUR）
- 3)If the currency of the account is in GBP, the required margin is: 1.27387=4026.20（GBP）