Index and share CFDs
What you learn in 3 minutesAn index CFD tracks a basket of companies, so its price moves with the whole group rather than one firm. A share CFD tracks a single company, so one set of results can move it sharply while the wider market barely shifts.
Two markets, one position size
| Step | Amount | Note |
|---|---|---|
| Index CFD position | 1 contract | the smallest size the broker allows for this index |
| Index price move | 20 points | the distance the index travelled while the position was open |
| Value per point | ₹75 | contract size multiplied by the rupee conversion the broker quotes |
| Gross result | ₹1,500 | 20 points x ₹75 per point |
| Share CFD position | 50 shares | the quantity chosen for the single-company trade |
| Share price move | ₹4 | the change in the share price over the same session |
| Gross result | ₹200 | 50 shares x ₹4 |
The broker may round the value per point, quote a wider spread on the index than on the share, and apply a financing charge for positions held overnight. A dividend paid by a company inside the index, or by the single company, is usually adjusted in cash on the account. These terms vary between brokers, so check the contract specification before sizing a trade.
The mistake people make here
The common mistake is treating an index CFD like a currency pair and leaving it open through the close of the foreign session. An index has a daily maintenance window and a set of opening and closing times that follow its home exchange, not Indian hours. A position held across that window can be closed or repriced without the reader watching. The fix is to write down the trading hours and the next corporate event date before entering, and to check whether the broker applies a dividend adjustment that changes the account balance.Check yourself
An index CFD moves 12 points and the value per point is ₹60. What is the gross result?
12 x ₹60 = ₹720.
A share CFD of 40 shares rises by ₹3.50. What is the gross result?
40 x ₹3.50 = ₹140.
One standard lot of USD/INR is 100,000 units and one pip is 0.0001. What is one pip worth in rupees?
100,000 x 0.0001 = ₹10.
In India
- Regulator
- SEBI oversees the securities market, including the exchanges and intermediaries.
- Money
- The rupee, written ₹ (INR), is the currency used for the figures in this lesson.
- Instrument in examples
- USD/INR, quoted around 83.2500.
- Payment methods
- UPI and bank transfer are the usual ways to move money to and from a trading account.
- Costs
- Broker charges, spreads and any currency conversion vary between brokers, so compare the contract specification rather than assuming a single rate.