Stock indices: US500, NAS100 and DAX

The news says “the market fell 2% today”. Behind that one figure are hundreds of share prices, and an index CFD lets you trade the figure itself.

One number for many shares

A stock index is a weighted average of a group of share prices. The three you will see most:

• US500 follows the S&P 500: about 500 large US companies, weighted by their market value. A handful of the largest make up a big slice: in 2024 the ten largest were about a third of the index.
• NAS100 (also US100 or USTEC) follows the Nasdaq-100: 100 of the largest non-financial companies listed on the Nasdaq exchange, heavy in technology. It usually swings more than the US500.
• DE40 (also GER40) follows Germany’s DAX: the 40 largest companies on the Frankfurt exchange. It is priced in euros.

An index CFD pays the change in the index level times your size, like any CFD. The usual unit is money per point: with $1 per point per lot, a 30-point rise earns $30 on 1 lot. Brokers use different sizes ($1, $10, even $25 per point), and minimum sizes are often 0.1 or 1 lot. Check the contract specification.

Cash or futures-based

Platforms offer two kinds of index CFD:

• Cash (or “undated”): tracks the index level now, has no expiry, and charges financing each night you hold it.
• Futures-based (or “dated”): tracks a specific futures contract, usually expiring each quarter in March, June, September and December. Its price already includes the cost of carry, so there is no nightly charge, but the spread is often wider and the contract must be rolled or closed at expiry.

Cash CFDs suit trades of hours or days; futures-based ones can be cheaper for holds of weeks.

When a company in the index pays a dividend, its share price drops by that amount on the ex-dividend day, and the index drops with it. On a cash CFD the broker makes a dividend adjustment: longs are credited and shorts debited the same number of points, so the mechanical drop costs neither side. The DAX is a total-return index that already counts dividends, so many brokers make no adjustment on DE40. Check yours.

What moves indices

Risk-on (confident)Risk-off (fearful)

AUDAustralian dollarNZDNew Zealand dollarCADCanadian dollarGBPBritish poundEUREuroUSDUS dollarJPYJapanese yenCHFSwiss franc

Tap a currency to see why it behaves this way.

Risk-on versus risk-off for the major currencies. Indices are not shown, but they behave like the risk currencies: they tend to rise with AUD and NZD when investors are confident and fall when fear sends money to USD, JPY and CHF.

Indices respond to company earnings, especially the largest companies; to interest rates and bond yields (the tech-heavy NAS100 is the most sensitive, because higher yields cut the value of profits far in the future); to US data and central bank decisions; and to overall risk mood. The US cash session runs 9:30–16:00 New York time (14:30–21:00 UK most of the year), and the first minutes after the open are often the busiest.

Try it

Instrument

Gold (XAU/USD)WTI oilUS500NAS100DE40

Account balance ($)Risk per trade (%)Stop distance (points)$ per point, 1 lotPriceLeverage1:21:51:101:201:301:501:1001:2001:500

Margin locked up Lost at the stop

1 lot, per one-unit move

Position size

Lost if the stop is hit

Position value

Margin required

Illustrative prices and typical contract sizes. Contract sizes, minimum lots and margin rates vary by broker: copy the figures from your own platform’s contract specification.

Switch from US500 to NAS100 and DE40 with the same risk: note how many more points the NAS100 stop needs, and that DE40’s money per point is in euros, about $1.08 at EUR/USD 1.08.

Quick check

Quick check

1. Question 1 of 4

   Your US500 CFD is $1 per point per lot. You hold 2 lots and the index rises 35 points. What is the result?

   A+$70B+$35C+$700

Go deeper: Forex vs stocks · Risk-on vs risk-off · Position sizing in forex