Indices - Module 1
How index markets work
What an index is and what it is not - a calculation, not a tradeable thing. Who trades indices, cash versus derivative venues, and the daily rhythm around the open and close. The wrappers that make an index tradeable come in module 3; composition and rebalancing mechanics live in module 8.
9 lessons, about 56 minutes
- 1An index is a calculation, not a company6 min
- 2Why two indices disagree about the same day6 min
- 3Who trades indices, and why most of it is not speculation6 min
- 4Where an index price actually comes from6 min
- 5Your index quote is your broker's, and it is not the index7 min
- 6The two prices, and what the spread is quoted in6 min
- 7What actually moves an index6 min
- 8Index points, contract sizes and what a point is worth7 min
- 9The index day: two auctions and the hours between6 min