The NASDAQ is the second-largest stock exchange on earth and one of the most famous indices in the world with companies like Microsoft, Amazon, and Tesla.
Nasdaq 100 captures the performance of the exchange’s largest non-financial companies. 52% of Americans invest in the stock market.
There are different ways to trade or invest in the Nasdaq 100. Below is a description of how you can get in there, what options are available, etc.
How to Trade or Invest with the NASDAQ
If you want to trade or invest in the NASDAQ, follow these three steps:
1. Decide if you want to trade or invest
There are multiple ways to get exposure – including trading or investing in ETFs and individual stocks or trading the value of the index.
2. Create a trading plan
Before taking a position on the NASDAQ, you must decide whether you are a short or long-term trader – and how you will manage your risk.
3. Open a live account
Then open and fund any or all of the following accounts:
– Spread Betting
– CFD trading
– Stock trading
There are a number of ways to get exposure to NASDAQ, so you can choose the one that suits you best.
For example, you can:
– trade directly on the NASDAQ 100 index
– invest in NASDAQ ETFs
– or trade or invest in NASDAQ stocks
Trade directly on the NASDAQ index
Trade the performance of the largest national and international companies in the US from a single location. You can trade the NASDAQ with leverage by using spread betting or CFDs without having to own real shares. Instead, you deposit to open a larger position, with profits and losses calculated on the full position size.
Therefore, your profits and losses can significantly exceed your margin amount. You can go longer if you think the price will go up or go short if you think the price will go down. Spread CFDs are commission free when you trade as the fees are included in the spread.
Trade or invest in NASDAQ 100 ETFs
Get broad exposure to the entire NASDAQ 100 by trading or investing in an ETF that tracks the price of the index. This means that you are not trading the current NASDAQ price, but the ETF’s price, which is calculated based on its net asset value (NAV).
Investing in NASDAQ ETFs gives many longer-term investors exposure to the entire index. You can do this with stock trading. Here you would buy up front, based on the ETF’s total value, and hold until you decide to sell.
You can also trade NASDAQ ETFs leveraged with spread betting or CFDs, but remember that this offers lower liquidity and higher spreads than dealing with the index directly. Leveraged trades mean you can go long or short on NASDAQ ETFs. However, total profits or losses can significantly exceed your margin amount as both are based on full position size.
Trade or invest in NASDAQ stocks
Target specific stocks like Facebook, Tesla, or Alphabet without gaining exposure to the entire index. With this option, you choose your own NASDAQ stocks based on your personal trading strategy.
You can also trade NASDAQ companies without owning shares using spread investing or CFDs. These are leveraged trades, so you can go long or short.