What Are Cash Indices and How Can You Trade Them?

23-Dec-2025

Have you heard of the term ‘cash indices’ but aren’t quite sure what it means or how to trade them? You’re not alone, and this guide breaks it down clearly and simply.

What are Cash Indices?

Cash indices are Contract for Difference (CFDs) that let you speculate on the performance of major stock market indices, without owning any shares. These instruments track the real-time prices of indices made up of leading global companies, such as the S&P 500, Dow Jones, and Nasdaq.

Trading a cash index means you’re trading on the price movement of the index as a whole, giving you broad market exposure with a single position.

How does Cash Index trading work?

When you trade cash indices via CFDs, you're speculating on whether the price of the index will rise or fall. You don’t own the underlying assets. You’re simply trading on their price movements.

Down

Rate

15430.5

Rate

15430.5

How it works:

Choose the cash index you want to trade (e.g., US 500, Nasdaq 100, DAX 40).
Enter your trade size.
Decide to go long (buy) or short (sell), depending on your market view.

Example:

Suppose the US 500 is trading at 4000.

You expect Apple’s earnings to disappoint, dragging the index lower, so you short one contract.

If the index rises to 4100, you close the position with a 2.5% loss.

If it falls to 3900, you gain a 2.5% profit.

You never own the index – you just trade the price difference.

Why trade Cash Indices?

Trading cash indices offers several benefits:

Diversification: Get exposure to hundreds of companies with one CFD position.

Liquidity: Major indices are highly traded, so entering and exiting positions is quick and efficient.

Lower volatility: Compared to individual stocks, indices tend to move more steadily.

No expiry: Unlike futures, cash indices have no expiry date, so you can close your trade when you choose.

Risk control: Since indices average multiple companies, they’re less sensitive to a single company’s performance.

With easyMarkets you can access a wide range of indices on all our trading platforms.

How to Trade Cash Indices

Getting started is simple:

Open your easyMarkets account.

Choose your index (e.g., Nasdaq, Dow, US 500).

Go long or short, based on your market outlook.

Set stop-loss orders to manage risk.

Monitor your position and close it when ready.

With easyMarkets, you can trade cash indices with tight fixed spreads and risk management tools like Guaranteed Stop Loss with No Slippage* and Negative Balance Protection.

*Guaranteed Stop Loss with no Slippage is only available on easyMarkets web & app trading platform. Activate with wider spread for total risk control.  

Conclusion

Cash index trading gives you the ability to speculate on global markets without owning individual stocks. With just one CFD, you can gain access to broad market exposure, potentially reduce risk, and act on global trends – all with flexible entry and exit.

Whether you’re a beginner or an experienced trader, adding cash indices to your trading strategy could offer diversification and opportunity in one move.

Have you heard of the term ‘cash indices’ but aren’t quite sure what it means or how to trade them? You’re not alone, and this guide breaks it down clearly and simply.