CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Between 54-87% of retail CFD accounts lose money. Based on 69 brokers who display this data. *Availability subject to regulation.
The Nasdaq is an American stock market owned and operated by Nasdaq Inc. It is the second largest in the world by market capitalisation, after the New York Stock Exchange. The Nasdaq-100 (NDX) is a modified capitalisation-weighted index composed of 100 of the largest equity securities listed on the Nasdaq. It includes companies from a wide spectrum of nonfinancial industries, such as Technology, Health Care, and Retail. The Nasdaq-100 is the premier large-cap growth index and provides the basis for benchmarking numerous investment products. Around 50 Billion ETPs (Exchanged Traded Products) were benchmarked to the Nasdaq-100, according to a study by the Nasdaq research team in 2015.
Nasdaq-100 was launched on January 31st, 1985, presenting itself as an alternative to the NYSE indices. It created two separate indices: the Nasdaq-100, which consists of stocks from Industry, Retail, Technology, Telecommunication, Healthcare, Biotechnology, Transportation, Media & Services; and the Nasdaq Financial-100, which consists of insurance firms, banking companies, brokerage, and mortgage companies. Nasdaq expected these to be used as benchmark indices by market participants, anticipating a healthy derivatives market to develop around them. The index was rebalanced to a modified market cap index on December 21st, 1998, followed by special rebalance effective from May 2nd, 2011.
The index comprises 100 of the largest non-financial organisations, based on market capitalisation, that are listed on the Nasdaq stock market. The past three decades have seen Nasdaq-100 evolve from being the market’s technological index to a leading indicator of strong growth potential companies, who are leading industry-wide innovation. Companies included in the Nasdaq-100 have driven economic growth in the recent years and they represent a shift in the business world in the 21st century. By the end of 2014, 448 stocks had been a member of the Nasdaq-100 since its inception. In recent years, somewhere between 7 to 15 stocks have been added or removed each year. The top ten companies who have held the highest weights in the index during the recent years are Apple, Microsoft, Amazon, Google, Facebook, Gilead Sciences, Intel, Cisco & Comcast. The main sectors included in Nasdaq 100 as at the 30th June 2019 were: Technology – 53.48 %; Consumer Services – 24.63%; Health Care – 11.10%; Consumer Goods – 5.49%; Industrials – 4.33%; and Telecom – 0.97%.
The top ten securities by weight as at 1st May 2019 were as follows:
|GOOG||ALPHABET CL C CAP||3.89%|
|GOOGL||ALPHABET CL A CMN||4.43%|
|CMCSA||COMCAST CORP A||2.34%|
|CSCO||CISCO SYSTEMS INC||2.93%|
The eligibility criteria for any stock to be included in Nasdaq-100 are as follows:
The Nasdaq-100 is a modified market capitalisation-weighted index, which means that its value is derived from the aggregate value of index share weights of each index security, multiplied by the last trading price of the security, which is then divided by the divisor of the index. The divisor serves the purpose of scaling down the obtained aggregate value, which is more desirable for the practical use of the index.
The base value of the index was set at 250, and reset to 125 when it closed at 800 on December 31st, 1993.
The index value is calculated on each trading day, based on the Last Traded Price, once per second for the whole trading window of the day.
The index can be traded through financial institutions such as brokers and serves as an underlying asset for a variety of products. These include exchange-traded funds (ETFs) and derivative instruments such as futures, options, and contracts for difference (CFDs).
ETFs are funds whose value reflect the value of an index as they are composed of shares that are present in the index itself. The ETFs attempt to track the index as closely as possible. ETFs can be traded on the exchange and can be bought as individual stock, allowing traders to follow the index with just one holding.
Another way of speculating on the movement of the indices without owning the shares is through CFDs. As CFDs allow users to speculate on the value of the index, traders can go for long contracts when they believe the index will move up and the price will therefore increase; or go short on the CFD when they believe the index is going down and prices will therefore decline. CFDs are usually highly leveraged products, which means that traders can have a large holding for a relatively small margin. Margin refers to the proportion of the trade that is required to be put down as deposit.
CFD products are highly popular for the Nasdaq-100 index.
However, it is necessary to keep in mind that CFDs are highly leveraged products and pose a considerable risk of loss of capital. Only experienced traders with the right risk appetite should venture into trading in these instruments.
Authorised and regulated online CFD broker Plus500 offers a US-TECH 100 (NQ) CFD which is based on the E-mini Nasdaq 100 futures, itself based on the underlying Nasdaq 100 Index. Trades in the instruments are offered at a spread of 1.7, with a minimum contract size of 1, and an initial margin requirement of 0.33. The intuitive platform calculates the minimum trade sizes and margins required to place a trade automatically. The manual calculation is as follows: CFD Margin = V (lots) × Contract × Market Price × Margin Rate, %.
Source: Google Finance
Nasdaq-100 is one of the most comprehensive market indices that captures the overall movement of 100 market mover stocks. The index is well diversified in sectoral allocation and has beaten multiple other indices in its returns. The index serves as the benchmark and underlying value for numerous other instruments such as ETFs and multiple derivative products such as CFDs. CFDs for the Nasdaq-100 are readily available and offered by many regulated brokers, such as Plus500 and AvaTrade. The trading platforms offered by these brokers are user-friendly and compatible on hand held devices as well as desk top computers.
Forex.com scored best in our review of the top brokers for trading nasdaq 100 , which takes into account 120+ factors across eight categories. Here are some areas where Forex.com scored highly in:
Forex.com offers one way to tradeForex . If you wanted to trade NASDAQ100
The two most important categories in our rating system are the cost of trading and the broker’s trust score. To calculate a broker’s trust score, we take into account a range of factors, including their regulation history, years in business, liquidity provider etc.
Forex.com have a AAA trust score . This is largely down to them being regulated by Financial Conduct Authority, segregating client funds, being segregating client funds, being established for over 19
|Regulated by||Financial Conduct Authority|
|Uses tier 1 banks|
|Segregates client funds|
Want to see how Forex.com? We’ve compared their spreads, features, and key information below.
|GBP/USD Spread||0.9||DAX Spread||250.0|
|FTSE 100 Spread||150.0|
|Platform||MT4, Web Trader, NinjaTrader, Tablet & Mobile apps|
|Base currency options||USD, GBP, EUR|
|Funding options||Bank transfer, Cheque, DebitCard,|