How to Trade Indices on eToro?

Written by Mike Druttman

Fact checked by Wikitoro Team

Updated Mar, 2024

To trade indices on eToro, open the platform and go to "Discover," then select "Indices." Pick the stock index you want to invest in and choose to either "Buy" or "Sell." Adjust your investment settings as per your strategy, then click "Open Trade" to begin your index trading position.

The Basics

Trading indices via this broker requires only a few steps based on my personal experience and it doesn't matter if you prefer to do it using the eToro app or the website. The process is bascially the same. To assist you, I've compiled a concise step-by-step guide, along with some helpful information, to enhance your index trading experience with this broker.

Understanding CFD Indices

In index trading on eToro, you engage in transactions involving Contracts for Difference (CFDs) which offers several advantages over trading stock index futures:

1. Firstly, CFDs provide higher leverage than traditional trading, meaning you can gain a larger market exposure for a relatively small initial deposit, potentially maximizing profits. However, it's important to remember that while leverage can magnify profits, it can also amplify losses. Secondly, CFD trading allows for easy short selling, enabling traders to profit from falling markets as well as rising ones.
2. Additionally, CFDs typically have lower entry barriers in terms of capital requirements compared to futures, making them more accessible to a broader range of investors.
3. Lastly, CFDs often come with no expiry date, offering more flexibility in terms of holding positions for as long as desired, unlike futures which have a set expiration date.

However, it's crucial to be aware of the risks, including the possibility of losing your investment. I recommend employing risk management strategies, like eToro stop-loss orders, is essential to mitigate potential losses. I discovered that tools are available on this platform so be sure to take advantage of them.

Before You Begin Trading

Prior to diving into index trading with this broker, it's important to consider a few essential steps for a smooth experience:

• Ensure your eToro account is fully verified.
• Verify that your account has sufficient funds, keeping in mind that the minimum deposit for this asset class is $1,000.
• Be aware of the market's volatility and understand that your capital is at risk, necessitating cautious and informed trading decisions.

How to Trade Indices on eToro

Initiating index CFD trades on this platform is a user-friendly process. Simply follow these steps to get started:

1. Access the platform using your account and select "Discover".
   

   

2. Choose "Indices".
   

   

3. Identify the stock index you're interested in and opt for either "Buy" or "Sell".

   

4. Determine your investment amount.
   

   

5. Adjust settings like leverage, stop-loss, and take-profit orders to align with your trading strategy.
   

   

6. Finally, click "Open Trade" to commence your trading position.
   

   

Parting Words

And that's how you do it! With just a few simple clicks, you can start trading eToro indices and add them to your investment portfolio. Remember to keep in mind the key points highlighted in this guide. I hope this information assists you in becoming a more knowledgeable and savvy trader. 

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

This communication is intended for information and educational purposes only and should not be considered investment advice or investment recommendation. Past performance is not an indication of future results.

Copy Trading does not amount to investment advice.  The value of your investments may go up or down.  Your capital is at risk.

Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.

Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which hasbeen prepared by our partner utilizing publicly available non-entity specific information about eToro.