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.
It is the most popular and quoted indices of Japanese equities and its name is derived from the Nihon Keizai Shimbun newspaper which has been responsible for the calculation of the index since 1950.
It is the Japanese equivalent of the American Dow Jones Industrial Average, and for a while (from 1975 to 1985), it has even been referred to as the Nikkei Dow Jones Industrial Average.
The 225 components of the Nikkei Index as at February, 2017 include 11 food companies, 10 automotive companies, 5 textiles and apparel companies, 5 precision instrument companies, 3 pulp and paper companies, 3 manufacturing companies, 17 chemical companies, 2 fishery companies, one mining company, 9 construction companies, 7 trading companies, 8 pharmaceutical companies, 8 retail companies, 2 oil and coal product companies, 11 banks, 2 rubber product companies, 8 glass and ceramic companies, 3 securities companies, 6 steel product companies, 6 insurance companies, 12 non ferrous metal companies, 5 real estate, 1 other financial service company, 8 railway companies, 16 machinery companies, 2 other land transport companies, 3 marine transport companies, 1 air transport company, 1 warehousing company, 28 electrical machinery companies, 6 communication companies, 3 electrical power companies, 2 gas companies, 9 services companies and 2 shipbuilding companies.2
Due to the large number of components, the Nikkei Index can be used as a reliable indicator of the state of the Japanese economy and as a measure of investor sentiment.
Components could be changed during an annual review called a Periodic Review, or upon delisting of a component company through an Extraordinary Replacement. The constituents of the Nikkei are reviewed on an annual basis every autumn and if a change is decided, it normally takes place in October.
The selection criteria is based on two main factors:
Additionally, to be considered for selection, the constituent must be listed on the Tokyo Stock Exchange First Section and must be an ordinary share.
1. T&D with a price of 1924, an increase of 5.02%
2. Alps Electric with a price of 3490, an increase of 3.87%
3. Sony with a price of 3661, an increase of 3.65%
4. Nomura with a price of 767, an increase 3.58%
5. All Nippon Airways with a price of 348.90, an increase of 3.56% 5
*as at time of writing: April 2017
The Nikkei Index is price weighted, which means that each stock proportionately affects the value of the index according to its price.
The index value is calculated by adding up the prices of the components and dividing them by the total number of components, in this case, 225.
While it is not possible to trade directly on the Nikkei Index, investors can make use of either Futures, Options, Contract for Difference (CFDs) or by charting the market.
CFDs are tradable instruments that represent the difference between when a contract is entered and when it is exited, this allows for gains or losses when the underlying index (in this case, the Nikkei Index) moves.
The advantages of trading the Nikkei Index as a CFD include, a higher leverage as CFDs traditionally have lower margin requirements than other methods of trade, access to a variety of markets on the same platform, a variety of trading options and little or no brokerage fees.
This means that a trader would only require an account size 65.62 to purchase one contract of the Nikkei 225 Index. (19,686/300=65.62)
It is important to note however that leverage can go both ways and amplify both losses and profits.
In summary, trading the Nikkei 225 as a CFD has one the lowest capital requirements for a trader.
Forex.com scored best in our review of the top brokers for trading nikkei 225 , 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 NIKKEI225
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,|