OANDA is the leading Internet currency trading company and a global leader in foreign exchange local currency and currency information services. The FXTrade foreign exchange trading platform based on Java technology provides retail and institutional clients with a cutting-edge platform to enter the foreign exchange market in a competitive and real-time manner.definitionThe stock price index, also known as "stock market index" or "stock index", is often referred to as "stock index" in news reports, and its English name is "Stock Index", which refers to the measurement of a certain stock market (or certain stocks in a certain stock market) Quantitative indicators of market quality. The stocks included in a stock price index are generally referred to as the "constituent stocks" of that stock price index. By comparing the value of the stock price index in different periods, investors can better understand the changes in the stock market. Generally speaking, an increase in the stock index represents an increase in the stock market (the market is getting better), and a decline represents a decline in the stock market (the market is getting worse). In addition to showing the stock market, the stock price index is also a barometer of the industry outlook and the overall economy. For example, the US Nasdaq 100 Index can be used to measure the performance of the US technology industry. Another example is the CAC 40 index of France, which can show the economic performance of France and Europe as a whole. Changes in the NASDAQ 100 Index in the past five yearscalculation methodAlthough there are many ways to calculate the stock price index, generally speaking, it is some kind of average value of the stocks contained in it. For example, suppose there is a stock price index called the X Index, which includes the stocks of Amazon ($1,907.70 per share), Microsoft ($152.11 per share), and Apple ($240.91 per share). The calculation method of the X index can be simplified as: X index = (1,907.70 + 152.11 + 240.91) / 3 = 766.91 Every day, as the stock prices of these three companies fluctuate, the X index also fluctuates. However, we will find that under this average algorithm, the lower the stock price, the smaller the influence on the X index. For example, in the above situation, assuming that Microsoft's stock price rose by 10% in one day, while the stock prices of the other two companies remained unchanged: X index = (1,907.70 + 152.11 * 110% + 240.91) / 3 = 771.98 But if Amazon's stock price rose by 10 %, and if the stock prices of the other two companies remain unchanged, the X index will be very different: X index = (1,907.70 * 110% + 152.11 + 240.91) / 3 = 830.50 Microsoft and Amazon, which are both technology companies, have similar volumes , but the same increase of 10% has resulted in two X indices with a large difference. In order to solve this problem, many stock price indexes adopt the method of weighting the market value of the company and then taking the average stock price. That way, as long as companies have similar market capitalizations, they will have similar influence on the indices they belong to, even if their stock prices differ widely.Risk statementContracts for Difference (CFDs) are complex financial products that carry a high risk of loss. 76.8% of retail clients lose money when placing trades. You should consider whether you can afford to take the high risk of loss. The information on this website is general in nature. We recommend that you seek independent financial advice and ensure that you fully understand the risks involved before trading. Please review oanda.com's Product Disclosure Statement (PDS) and Financial Services Guide (FSG) carefully before you trade.