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 Russell 3000 stock index is weighted by market capitalisation and encompasses the 3,000 largest, publicly listed companies on the United States stock market. All companies listed on the Russell 3000 are incorporated in the United States and derive the majority of their annual revenue from the US economy. The Russell 3000 is one of the largest stock indices in the United States and the index aims to act as a benchmark for the US stock market.
The Russell family of stock indices began rather modestly in 1936 when Frank Russell opened a small retail brokerage operation in Seattle, Washington under the name of Russell Investments. The Russell 3000 was the first stock index formed by the Russell family in January 1984. The Russell 1000 (the top 1000 companies in the Russell 3000 by market cap) and the Russell 2000 (the smallest 2000 companies by market cap) followed shortly thereafter. The Russell 1000 and 2000 are therefore subsets of the Russell 3000.
Today, Russell Investments along with its family of stock indices are part of FTSE International Limited. FTSE joined forces with Russell in 2014. FTSE International Limited is a British provider of stock market indices and associated data services.
The Russell 3000 represents 10 different sectors of the US economy. These sectors include basic materials, consumer goods, consumer services, financial services, healthcare, industrials, oil & gas, technology, telecommunications, and utilities. Financials constitute the largest industry within the index at 19.1%.
The ten largest companies in the Russell 3000 include Apple, Alphabet Inc (C shares), Microsoft, ExxonMobil, Berkshire Hathaway, Facebook, Amazon, Johnson & Johnson, JP Morgan Chase, and Wells Fargo. These ten companies represent 15.4% of the entire index. The largest company, Apple, represents 2.6% of the index.
The vast majority of stock indices are reviewed on a quarterly basis in order to determine if the index needs to be changed or adjusted. However, the Russell 3000 Index is rebalanced on an annual basis. The rebalancing occurs each year during the last week of June.
Russell refers to its annual rebalancing as “reconstitution.” The annual reconstitution involves a complete overhaul of the index. Essentially, the entire Russell 3000 Index is rebuilt on an annual basis.
The initial phase of the rebalancing actually begins in May, when all securities are ranked by their total market capitalisation. Upon completion of the rebalancing, the largest 3,000 securities become the “new” Russell 3000 Index.
The companies that make the top 3,000 are added to the index. Conversely, the companies that fall off the list are removed from the index. The new list is announced to the financial community each year in May. However, Russell does not add or remove companies until the following year.
Companies which are involved in an initial public offering (IPO) are treated in a different manner in regards to the Russell 3000 Index. IPOs are reviewed on a quarterly basis as opposed to an annual basis. The companies are added to the index on the third Friday of March, September, and December.
The Russell 3000 Index is a market capitalisation weighted index. The formula for market capitalisation involves multiplying the stock price by the number of shares outstanding. All share classes are included when calculating the index.
In terms of market capitalisation, Apple is the largest company, with a market capitalisation of $814 billion. JG Wentworth is the smallest company in the index at $14.2 million. The total market capitalisation for the entire Russell 3000 Index is $27.2 trillion.
The most popular Russell indices for trading are the Russell 1000, Russell 2000 and Russell 3000. In regards to trading these indices, some traders prefer to use a stock index futures contract or an exchange traded fund (ETF). However, only the Russell 2000 is available for trading as a stock index futures contract. This index is listed on the Chicago Mercantile Exchange and the Intercontinental Exchange. In terms of an ETF, only the Russell 3000 is tradeable within the Russell family of indices. More specifically, the Vanguard Group, iShares and SPDR offer an ETF product tracking the Russell 3000.
For those who prefer a more leveraged approach to tracking the index, speculators can trade using a contract for difference (CFD). CFDs are a popular form of derivative trading. The most popular Russell index to trade as a CFD is the Russell 2000 – the small cap index.
As an example, if a trader was to take a minimum buy trade out on the Russell 2000 CFD offered by regulated brokers, London Capital Group (Russ 2K), a calculation for the minimum margin required would be: (Minimum spread of 0.3) x (minimum trade size 0.1 lot) x (value of one lot of $100) x price of stock at time of buying – in this case 1429.45) x Margin requirement of 0.20%) = $8.58.
*All information collected from LCG as at 30th July 2017. Please refer to the LCG website for full terms and conditions.
CFD transactions allow the trader to speculate on an asset without actually owning or taking delivery of the asset. Traders can also go short on a CFD, if they believe the index will decline.
There are usually no commissions charged by brokers when trading a CFD. Brokers collect their fee through the spread price – the difference in pips between the buy and the sell price.
The Russell 2000 index is available for CFD trading with leading authorised and regulated CFD brokers such as Plus500, AvaTrade and the London Capital Group (LCG). The latter were established in 1996, and are publicly listed on the London Stock Exchange. As well as the Russell indices, clients using the platforms provided by these brokers have full access to a wide range of other financial markets and financial instruments.
Source: Google Finance – 30th July 2017
Forex.com scored best in our review of the top brokers for russell 3000 , 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 SXP500
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,|