How to Open A Stock Indices Account

This learn stock indices tutorial will show traders how to set up their trading account so that they can begin to trade stock indices. Before opening a stock indices account there are various factors that traders should consider before taking this step.

To open a stock indices account, traders need to find an online stock indices broker and then they can setup their trading account with the broker that they choose. Once a trader opens this stock index account the trader will then use it to place trades in online stock indices market & the profits & losses that they make when trading will be accounted for in this stock indices account.

A trader will need to consider the following factors when opening a stock indices account:

Regulation of Stock Indices Broker

Before opening a stock indices account traders must first know that they should only choose to trade with a regulated stock indices broker. In stock indices there are hundreds of stock indices brokers, some are regulated and other which are not. A trader must do due diligence when selecting a broker and check the regulation license details of the broker they want to trade with. Remember some brokers which are not regulated will write an article on their stock indices website about stock indices regulation and link to this article - if a trader is not careful they will be tricked into thinking that the broker is regulated, make sure to check the license details of the broker and you can also confirm these details with the regulatory authority regulating the broker.

Indices Leverage

Traders should consider the stock indices leverage offered by the broker when it comes to opening and accounts. With stock indices leverage a trader controls a large amount of capital while using little of their capital. Stock Indices Leverage is one of the reasons why a stock indices is very popular because traders can make a lot of profit from stock indices using little of their money.

A trader should therefore consider the stock indices leverage given by a broker some brokers give 100:1 & others as high as 400:1, with stock indices leverage 400:1 a trader who deposits $1,000 can borrow $400 for every $1 that they have & therefore the trader using this stock indices leverage will control $400,000 which they can use to open trades with.

Stop Out Level

This is where a broker will close all the trades of a trader if the traders make losses beyond a certain level. The best brokers will implement their stop out level at 20 % and at this level there is minimum chance of a stock indices trader’s transaction getting closed. However, there are stock indices brokers who are not very straight and these brokers will set the stop out at 100 % and with this level the likelihood of the trader’s transaction getting closed or stopped out are very high. A trader should make sure they open an account with a broker setting the stop out at 20 %.