The goal of every index trader is, of course, to profit from fluctuations in the value of an index. In contrast to stocks and commodities, which can be bought and sold on exchanges, indices can’t be owned outright like the assets they represent. Rather than directly trading indexes, traders bet on their fluctuations through derivatives such as contracts for difference.
In order to profit from these price fluctuations, it is crucial that traders deal with competitively priced brokers that allow them to make the most out of the indices trading endeavours. With Khwezi Trade, clients will be able to access the Nasdaq index with a max 1 pip limited spread, making it one of the tightest spread offerings on the market.
Trading the Nasdaq index on Khwezi Trade
Due to its high volatility, the NASDAQ is one of the most actively traded indices in the retail trading segment of the financial markets available through Khwezi Trade. Over three thousand of the most successful American businesses, from technology firms to media conglomerates, can be found among NASDAQ’s listings.
Given NASDAQ’s renown among investors and the speed with which its prices can fluctuate, it’s not hard to see why the market is so influenced by it.
Why tight, limited spreads matter when trading the Nasdaq index
If you’re a trader, you want to buy or sell when the spread between the bid and ask prices is narrowest. The key aspect that defines the spread is the asset’s liquidity, or how easily it can be traded on the market.
The rationale for this is that if there are many buyers and sellers, the lowest selling price and the highest buying price are more likely to meet in the middle.
The spread, of course, is also impacted by the size of any dealing costs built into it. When the market is illiquid, the market maker may charge higher fees to cover the risk that it will take longer to find a buyer or seller for your order. That’s why narrower spreads are associated with more liquid markets.
The term “limited spread” refers to the gap between the bid and ask prices that does not fluctuate even while the prices move when trading with Khwezi Trade.
The floating spread, on the other hand, is the difference between the bid and ask prices that moves in tandem with market dynamics.
With limited spreads, you can easily plan for the spread cost (whether long-term or daily) and make trading decisions accordingly. Because of this, it is possible to get a more accurate cost estimate before even beginning to trade.
Using limited spreads can drastically cut down on trading expenses. With limited spreads, you know exactly how much each trade will cost in advance, making it easier to plan for them. As a trader, this will help you tremendously in keeping costs down.
What’s more, having limited spreads ensures that everyone knows exactly what they’re paying for. Your trading costs will always be the same, regardless of fluctuations in interbank liquidity, market hours, or daily trading volumes. The spreads can’t be manipulated to benefit brokers in this way.
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