What is a financial index?

An index is an indicator of the average price of the shares or assets that make up the index and generally represent a specific market. There are hundreds of stock indices worldwide, representing companies or industries at national, regional, and global levels. An example of an index is the Dow Jones, which measures the performance of 30 of the most significant stocks listed on the New York Stock Exchange, e.g. Apple, Coca Cola, Microsoft, Visa, Walt Disney, etc

You cannot directly trade or buy an index because it is not a product in itself, but an indicator of the assets that make it up. Considering the above, people who trade indexes use derivatives or mutual funds (ETFs), among others, to speculate on the price of the index.

The most famous indexes include the Dow Jones, FTSE 100, Nasdaq -100, S&P 500, etc.