Trading the ASX 200
The ASX 200 Index follows the price of the 200 largest companies listed on the Australian Stock Exchange by market capitalisation (the total value of the shares of that company actively traded in the market).
The ASX 200 is a popular index with traders and investors in Australia. The Australian economy has benefited from global demand for natural resources, particularly in Asia. In some respects, the index is a benchmark of the performance of mining shares and the relative health of the global mining industry in general.
The ASX 200 includes many leading Australian companies, like Foster’s Group, Macquarie and Qantas. However, it has a strong bias towards mining companies, partly because BHP Billiton and Rio Tinto, two of the biggest mining companies in the world, are components, and partly because Australia’s strong mining industry has produced a large number of companies in the resources sector.
Apart from the mining sector, the ASX is also heavily laden with financial services companies, and some of its biggest constituents are banks like Commonwealth Bank of Australia and WestPac Banking Corporation.
To be included in the index, a company must be listed on the Australian Stock Exchange (ASX) and must meet a basic liquidity requirement: a minimum amount of its shares must be changing hands on a regular basis. Only shares that are freely available – those not controlled by governments, private equity funds, directors or company founders – count towards the total market capitalisation.
You can invest in or trade the ASX 200 in a number of different ways. Here are some of the most popular.
- Exchange Traded Funds
- Contracts for Difference or Spread Betting
- Futures & Options
Exchange Traded Funds
Exchange Traded Funds are a cheap and easy way of tracking the performance of the Aussie index. Exchange Traded Funds can be invested in like stocks and shares and can be found on many of the best investing platforms.
Invest in the ASX 200 with these ETF platforms
| Broker | Minimum Deposit | Markets | Products |
|---|---|---|---|
Admiral Markets | $250 | Bonds Commodities Currencies Indices Stocks & Shares | CFDs ETFs FX Stocks & Shares |
| Admiral Markets was founded in 2001. The broker offers the powerful MT4 and MT5 platforms across a number of account types which are designed for a wide range of trading experience. Clients can trade CFDs on Bonds, Commodities, Currencies, Indices, Stocks & Shares . On top of that, traders who are looking for real assets can invest in over 200 ETFs and 4,500 Stocks through a non-leveraged account with this online broker on MT5. Risk Warning: 61% of retail CFD accounts lose money with this provider. | |||
Interactive Brokers | $0 | Bonds Commodities Currencies Indices Stocks & Shares | CFDs ETFs FX Futures & Options ISA Stocks & Shares |
| Interactive Brokers is one of the world’s leading futures brokers with the ability to offer direct market access to a range of securities. With previous personal experience of trading with this broker, The Armchair Trader knows that they offer excellent platform stability, an excellent range of markets, and solid customer support | |||
Hargreaves Lansdown | £100 | Bonds Commodities Currencies Indices Stocks & Shares | ETFs ISA Stocks & Shares |
| With competitive rates for trading shares and ETFs and significant discounts on funds, Hargreaves Lansdown offer a cost effective way to access a broad range of markets. You can open a Stocks and Shares fund, ISA or SIPP for yourself or a Junior ISA for your children. We like their Portfolio+ and Master Portfolio services - they offer a great option for investors who are unsure about where to start. Hargreaves Lansdown is a market leading, FTSE 100 listed broker that can cater for the needs of the majority of investors. A solid choice in our opinion. | |||
Contract for Differences
Contract for Differences are leveraged products which means they involve greater risk. While there is an opportunity to increase your profits, there is also the chance of greater losses. The ASX 200 is often called the AUS200 on CFD trading platforms.
Trade the ASX 200 with these CFD brokers
| Broker | Minimum Deposit | Markets | Products |
|---|---|---|---|
Pepperstone | £0 | Bonds Commodities Currencies Indices Stocks & Shares | CFDs FX Spread Betting |
| With a strong focus on the trading experience, industry leading technology, low costs and award-winning client support, we feel that Pepperstone is a good option for the more established high volume day trader. | |||
FP Markets | $100 | Bonds Commodities Currencies Indices Stocks & Shares | CFDs FX |
| FP Markets is an established ASIC, CySEC FSP and CMA regulated broker. They offer access to the industry leading MetaTrader platforms and provide pricing directly from the market meaning fast execution and transparent pricing. A 24/7 multilingual client support service has won recognition through the highly respected Investment Trends awards. | |||
FxPro | $100 | Bonds Commodities Currencies Indices Stocks & Shares | CFDs FX |
| FxPro is a fully regulated CFD provider offering Forex, Metals, Indices, Futures, Cryptos and Stocks. Clients have access to over 2000+ financial instruments and the company serves clients in 173 countries worldwide. FxPro was voted ‘Best Forex Provider’ by The Armchair Trader readers for 2024. | |||
If you are based in the UK, spread betting is a tax free alternative to Contract for Differences. You can find our list of spread betting brokers here to get you started.
Futures
Futures and options are contracts that enable traders to buy or sell the ASX 200 index at a predetermined price on a future date, Our Partner, CME Group has a range of futures products based on the price of the ASX 200, and traders can open an account with an approved broker to trade CME Group futures.
Trade the ASX 200 with these futures brokers.
| Broker | Minimum Deposit | Markets | Products |
|---|---|---|---|
| Interactive Brokers | $0 | Bonds Commodities Currencies Indices Stocks & Shares | CFDs ETFs FX Futures & Options ISA Stocks & Shares |
| Interactive Brokers is one of the world’s leading futures brokers with the ability to offer direct market access to a range of securities. With previous personal experience of trading with this broker, The Armchair Trader knows that they offer excellent platform stability, an excellent range of markets, and solid customer support | |||
IG | £0 | Bonds Commodities Currencies Indices Stocks & Shares | CFDs ETFs FX Futures & Options ISA Spread Betting Stocks & Shares |
| Widely recognised as the largest broker of its kind for CFDs and Spreadbetting, IG has now expanded its services to include Equities and ETF trading. Their range of markets is wide reaching while both trading and share dealing costs are low. We really like their Smart Portfolio's which are ideal for inexperienced investors to gain exposure to the markets. With deeper pockets to invest in their services than most brokers, IG's platform suite and trading support tend to lead the way. IG is a good all-rounder for novice through to experienced traders and investors. Risk Warning: Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. | |||
Tickmill | £100 | Bonds Commodities Currencies Indices Stocks & Shares | CFDs Futures & Options |
| Tickmill is an established, regulated broker. With a focus on platform technology, fast reliable trading and low costs, it is a good choice for the experienced high volume trader. | |||
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