Best Index Trading Platforms & Brokers of December 2023

When you trade indices, you eliminate all of the outside noise and focus solely on the broad trend of the market. Trading indices also allow you to capitalize on opportunities that arise between different sectors, asset classes, and countries.

However, to fully realize the benefits of index trading, it’s important to carefully select the right broker. Whether it’s industry-leading commissions or access to the most reliable assets, our guide will help you find the Best Index Trading Platform in no time!

Best Brokers for Indices Trading Ranked & Rated

Because the devil is in the details, it’s important to analyze all of the pros and cons before making your decision. However, to make the journey a little bit easier, we’ve reviewed the best index trading platforms and trading apps to help you find the right broker for you.

1. eToro – Overall Best Trading Platform for Index Funds

Topping our list, eToro is simply a cut above. With access to more than 2,400 stocks spanning 17 international markets, eToro’s 0% commission structure allows you to trade all of your favourite assets without incurring undue fees.

To determine which broker is the best index trading platform, it’s important to differentiate cost from efficiency. However, with eToro, you get the best of both worlds, as the U.K. broker is fully functional across all major exchanges – including stock markets from the NYSE, NASDAQ, FTSE 250, FTSE 100 and London Stock Exchange (LSE) – and you have access to both full and fractional shares.

Top-rated across nearly all categories, eToro is one of the best index trading brokers in the business. More importantly, though, eToro is a name that you know and trust: regulated by the U.K. Financial Conduct Authority (FCA), the Australian Securities and Investments Commission (ASIC) in Australia, CySEC, and U.S. FINRA, eToro’s commitment to transparency is second to none.

What’s more, if you’re new to trading and need a helping hand, eToro’s CopyPortfolios uses an innovative algorithm to construct a portfolio that’s tailored to your risk tolerance. As a result, you can feel confident knowing that your investments have the highest probability of success when you use this free trading platform.

eToro fees

Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees.

2. Libertex – Best Index Trading Platform for CFDs

Founded in 1997, Libertex has roughly 2.9 million clients worldwide. Specializing in CFDs, Libertex is one the best index trading brokers in the marketplace today.

In addition, Libertex accepts deposits via bank transfer, debit/credit card, and e-wallet and all deposits are free of charge. What’s more, withdrawals made through Skrill are always free, while withdrawals via other methods include a charge of €1 to 1%.

Unfortunately, though, Libertex does not offer 0% commissions. However, a 50% reduction is available for professional clients.

For a detailed breakdown of Libertex’s commission structure, please see below:

• Gold status: A €250 deposit earns you a commission discount of 3%.
• GoldPlus status: A €1,000 deposit earns you a commission discount of 4%.
• Platinum status: A €1,500 deposit earns you a 20% commission discount and access to priority withdrawals.
• VIP status: A €5,000 deposit or more earns you a 30% commission discount and access to priority withdrawals and premium customer support.

Cementing its position as one of the best indices trading platforms, Libertex’s demo trading account is extremely useful. Rather than having to risk your own capital right away, you can trade with €50,000 in virtual money and enjoy all of the platforms’ features free of charge with the demo account. Even better, all of Libertex’s services are fully functional on desktop, laptop, Apple iOS, and Android devices for mobile trading, as well as using its research tools.

You can also use Libertex’s demo paper trading platform to try the broker out before trading with real money.

Libertex fees

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74,5% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money

3. TD Ameritrade – Best Index Trading Platform to Build a Diversified Portfolio

Combining education with excellence, TD Ameritrade’s powerful platform, and its functionality helps you become a better trader and a smarter trader. As one of the best index trading platforms and online brokers, TD Ameritrade’s personalized educational service is tailored to your specific needs. Through interactive courses and webcasts, its commitment to knowledge makes TD Ameritrade one of the best indices trading platforms.

Offering 0% commissions and a bevy of advanced charting tools, finding the best index trading platform has never been easier. At the click of a button, you can trade through its brokerage accounts assets and financial products such as stocks, bonds, CDs, options ($0.65 commission per contract), non-proprietary mutual funds, futures, forex, and commission-free ETFs – all while enjoying a live stream of CNBC.

As the best trading platform for long-term investors, TD Ameritrade also grants access to Morningstar, CFRA, and TheStreet’s fundamental research reports, and the firm is fully regulated by U.S. FINRA.

Keep in mind though: you can only deposit funds through bank transfers and e-wallets aren’t accepted at this time.

TD Ameritrade fees

Your capital is at risk.

4. Charles Schwab – Best Index Trading Platform for Smartphone Investors

In the running for the best index trading platform, Charles Schwab’s StreetSmart Edge combines sophisticated technology with an easy-to-use layout. Finding, evaluating, and placing a trade has never been easier, and you can access the stock trading platform online or through Charles Schwab’s cloud platform.

Moreover, stocks, index ETFs, preferred shares, and REITs always trade commission-free, while index futures ($1.50 per contract) and index options ($0.65 to $1.50 per contract) also enjoy competitive pricing. However, despite being one of the best trading platforms for index funds, cryptocurrencies are not listed among Charles Schwab’s tradable assets, if you are more interested in crypto or forex, our TD Ameritrade vs Charles Schwab review goes over this in more detail.

Like other exceptional brokers, Charles Schwab’s technology works seamlessly on all desktop, laptop, Apple iOS, and Android devices, while the company’s Idea Hub can help you identify bullish, bearish, and neutral trade ideas all in real-time.

What’s more, its interactive Trade & Probability calculator allows you to effectively manage risk, while Micro E-mini futures allow you to trade all major indices at 1/10th the size and with lower margin requirements.

Charles Schwab fees

Your capital is at risk.

5. Interactive Brokers – One of the Best Indices Trading Platforms for Advanced Traders

With access to stocks, options, futures, currencies, bonds, and investment funds from a single integrated account, Interactive Brokers could be the best index trading platform. Through its proprietary technology, you can optimize your trading strategy and perform sophisticated technical analysis. What’s more, commissions begin at $0 (for U.S. listed stocks and index ETFs), while commissions on index options ($0.15 to $0.65 per contract) and index futures ($0.25 to $0.85 per contract) are also extremely competitive. Even better, for both IBKR LITE and IBKR PRO accounts, there is no minimum balance required.

If choosing IBKR Pro, clients also have access to the IB SmartRouting system – which saves roughly $0.47 per 100 shares and ensures that your trades execute at the best possible price.

Providing access to equity and bond indices on 28 exchanges across 14 countries, including short ETFs and leveraged ETFs, Interactive Brokers allows you to trade both index futures and index options. Even better, the platform is accessible across a wide variety of countries, including the U.S., U.K., Germany, and France.

Interactive Brokers fees

Your capital is at risk.

6. Plus500 – One of the Best Index Trading Platforms for Mobile Traders

As more of a niche broker, Plus500 could be the best index trading platform for CFDs. As a publicly-traded entity that’s regulated by the U.K. Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC), Plus500 is a trusted CFD broker.

Combining an easy-to-use platform with exceptional customer service, Plus500 shares a lot of similarities with our other best index trading platforms. Offering a $100 account minimum and no withdrawal fees, Plus500 accepts deposits in 16 different currencies as well as an e-wallet. And not offered by all brokers, Plus500’s demo trading account allows you to build your confidence before risking any of your hard-earned capital.

As the only downside, Plus500 does not allow scalping. Defined as “A trading strategy based on the notion that client transactions are opened and closed within 2 minutes in order to accumulate quick profits from small price changes,” if you buy and sell index CFDs on a minute to minute basis, you could have your account blocked.

Despite that though, Plus500’s platform works seamlessly on all Apple iOS and Android devices, so mobile traders should be extremely satisfied with the broker’s service.

Plus500 fees

72% of retail CFD accounts lose money.

7. Fidelity – Best Index Trading Platform for Individual Retirement Accounts (IRAs)

Last but certainly not least, Fidelity offers commission-free trading on all U.S. stocks, ETFs (including indices) and charges $0.65 per option contract (including indices). Clients also have access to analyst reports that cover more than 4,500 stocks and span more than 20 independent, third-party research firms.

In addition, Fidelity’s advanced charting features, streaming quotes and option to manage up to 50 stocks as a single basket, cements its position as one of the best index trading platforms. For mobile aficionados, Fidelity’s app also includes all of these great features on one easy-to-use interface.

As well, because Fidelity is well-known for its industry-leading wealth management services, you can manage your Individual Retirement Account (IRA) both directly, and with the help of a Fidelity financial advisor. Keep in mind though: Fidelity does not offer index futures or index CFDs, and although its margin rates are extremely competitive, they’re still higher than Interactive Brokers. To see how Fidelity matches up with other brokers, check out our Fidelity vs TD Ameritrade comparison review.

Fidelity fees

Your capital is at risk.

Index Trading Guide

To determine the best index trading platform for you, consider your time horizon, risk tolerance, and your preferred assets. If you’re an active trader, nearly all of the above options fit the bill. With access to real-time data and advanced charting tools, you can’t go wrong with any of the above names.

However, if you have a low-risk tolerance, avoid CFDs, futures, and options, and stick with trading index ETFs. Because the formers have leverage, you can gain/lose more on a single trade. Conversely, with index ETFs, the majority are equity-based, which means that gains/losses are similar to individual stocks.

Finally, always trade what you know. If you’re unfamiliar or uncomfortable determining margin requirements or analyzing option ‘Greeks,’ stick with index ETFs. Conversely, if you’re a sophisticated trader that’s looking to generate alpha, index CFDs, futures and options can greatly enhance your PnL.

What is Index Trading?

Rather than analyzing individual stocks, index trading allows you to speculate on an entire basket of equities, bonds, commodities, or even volatility.

Ways of Trading Indices

Because not all products are created equal, it’s important to understand the difference between cash indices, index CFDs, index futures, and index ETFs.

For starters, cash indices allow you to invest in the cash value of an underlying index. Unlike options and futures, there is no expiry date and transactions are executed immediately. Second, index CFDs allow you to participate in the movement of an index without having to own it or having to take physical delivery. Because most CFDs are cash-settled, you either receive or pay the net difference on the settlement date.

Third, index futures allow you to buy or sell an index at a future date based on a price that’s agreed upon today. Finally, index ETFs have no expiry date and can be used for short-term and long-term trading. However, you have to pay the entire cash balance upfront and you also incur portfolio management expenses.

Why Trade Indices?

Allowing you to significantly reduce risk, indices are less volatile than individual stocks. Because the index return is the sum of the returns of the underlying constituents, a single stock doesn’t make or break its performance. Moreover, indices are much better option for trading macroeconomic divergences. For example, if you expect the European economy to outperform the U.S., you can buy the DAX 30 index and sell the S&P 500 index. Thus, trading indices allows you to focus on the macroeconomic environment without having to worry about idiosyncratic events.

Index Trading Strategies

Common among experienced traders, continuation, reversal and breakout index trading strategies are quite popular:

Continuation Trading Strategies:

Using the old adage, ‘the trend is your friend,’ traders will hold an index as long as it remains in an uptrend. For example, as long as an index holds its 20-day and/or 50-day moving averages, technicals signal that the ascension will likely continue. The logic is: if the index is trending, why bet against it?

Reversal Trading Strategies:

In stark contrast, reversal traders often analyze an index’s Relative Strength Index (RSI). When an index’s RSI rises above 70 (overbought), it’s likely to suffer a short-term decline. Conversely, when an index’s RSI falls below 30 (oversold), it’s likely to experience a short-term rally. Likewise, Bollinger Bands is another useful indicator. Plotted two standard deviations above and below an index’s moving average, when the price rises to the upper Bollinger band, it’s likely to fall, and when the price declines to the lower Bollinger band, it’s likely to rise.

Breakout Trading Strategies:

Drawing triangles and pennants on the chart, narrow price action can help traders capitalize on an index’s breakout. Taking the shape of a horizontal triangle (think of a sideways ice cream cone), when an index shifts from having large price swings to trading in a tight range, it will often ‘breakout’ one way or the other. When this occurs, index traders can confidently take advantage of the new trend.

Frequently Asked Questions (FAQ)

References:

• https://en.wikipedia.org/wiki/Index_trading
• https://www.investopedia.com/index-trading-strategy-and-education-4689670
• https://admiralmarkets.com/education/articles/general-trading/index-trading