How to trade the ASX 200
The ASX 200 is a share market index which represents 200 large-cap companies listed on the Australian Securities Exchange. Learn the different ways to get exposure to the ASX 200 via our Australia 200 offering.
Start trading today. For account opening enquiries call 1800 601 799 between 9am and 6pm (AEDT) weekdays, or email newaccounts.au@ig.com.
Contact us: 1800 601 799
Start trading today. For account opening enquiries call 1800 601 799 between 9am and 6pm (AEDT) weekdays, or email newaccounts.au@ig.com.
Contact us: 1800 601 799
If you’d like to trade the ASX 200 (known as the Australia 200 on our platform), follow these three steps, or read our full guide below:
1. Decide whether you want to trade or invest
Choose between trading or investing in ETFs and individual shares, or trading on the Australia 200’s value.
2. Create a trading plan
Before taking a position, you'll need to decide whether you're a short- or long-term trader – and how you're going to manage your risk.
3. Open a live account
Then, open and fund any or both of the following accounts – CFD trading and share trading - start by filling in our application form.
What's on this page?
How can you trade the ASX 200?
With us, there are a number of ways to gain exposure to the ASX 200 – so you can choose the one that suits you best.
You can:
Trading the ASX 200 directly
Trading the ASX 200 is made possible through financial derivatives such as CFDs. A CFD will enable you to speculate on the ASX 200 rising or falling because it mirrors the price of the underlying market.
When you trade the ASX 200 with CFDs, you’ll be opening positions with leverage. This means you can get much larger market exposure while only having to commit an initial deposit. But, remember that while leverage can maximise your profits, it can also amplify your losses.
| Trading the ASX 200 | Investing in the ASX 200 | |
| Ways to trade | CFDs | Buying ETFs or shares outright |
| Market hours (AEST)* | 8am on Monday until 7am on Saturday (AEST)* | 10am - 4pm, Monday to Friday (AEST)* |
| Initial capital required | 5% of trade size | 100% of purchase price |
| Losses can exceed deposits | Yes | No |
| Timeframe | Shorter term | Longer term |
| Liquidity | Higher liquidity offered by trading the index than investing in ETFs |
*Times listed are affected by AU clock changes in the year, and will be adjusted by +/- 1 hour accordingly.
How to start trading in the ASX 200
If you’re ready to start trading in the ASX 200, follow these steps:
Create your account
You can open any one of the following account types:
Although you’ll use one account each for CFD trading and share trading, you can open one type of account with us, or both and you can access both accounts from your MyIG dashboard.
Ways to open your first ASX 200 trading position
How you’ll go about this will depend on the type of account you’ve chosen to open.
Ways to trade the ASX 200 with us
Cash index CFDs
You can get exposure to the ASX 200 by trading the Australia 200 Cash index CFD with us. This means that you’re trading at the current price of the index– known as the cash price or the spot price. Cash indices are popular with short-term traders because they offer some of our tightest spreads. However, you will be charged an overnight funding fee if you keep your cash indices positions open at the end of each trading day.
Index futures CFDs
You can also get exposure to the ASX 200 by trading Australia 200 index futures CFDs. This means you are agreeing to trade the index for a set price, at a predetermined future date (i.e., the expiry date). Index futures are popular among traders with a long-term outlook because overnight funding charges are included in the spread. This means that although the initial spread is wider, you won’t incur multiple overnight funding charges.
Options CFDs
Options trading is the act of buying and selling contracts that give the buyer the right, but not the obligation, to buy or sell an underlying asset at a set price at a date in the future. With us, you can trade a CFD on an option’s price. You can get exposure to the ASX 200 by trading daily, weekly, monthly or quarterly Australia 200 Option CFDs.
Share and ETF CFDs
You can also get exposure to all or part of the ASX 200 by trading the shares within the index itself or ETFs that track all or a particular sector within the index. These might include an ETFs that track the performance of the ASX 200 or a basket of individual shares that make up a desired percentage the index.
Ways to invest in the ASX 200 with us
ASX 200 ETFs
When you buy and sell ASX 200 ETFs, you’re buying shares in a fund that tracks the performance of the ASX 200 via our custodial model. This means that as a registered broker we manage, hold and safeguard securities you choose to buy and sell on your behalf. Investing in ETFs enables you to get exposure to the ASX 200 with a single transaction, rather than buying a range of individual constituent shares. You might also receive dividends if you’re investing in an income ETF.
ASX 200 shares
When you invest directly in ASX 200 shares, you receive an ownership stake in the underlying company via our custodial model. This means that you might be granted voting rights, and you’ll also receive dividends if the company pays them. To get effective exposure to the ASX 200 through individual shares, you’ll need to hold a basket of ASX 200 shares from a range of different sectors.
Learn what moves the ASX 200’s price
Economic events
Economic events such as the market reaction to the coronavirus pandemic can affect the price of the ASX 200 – particularly if lockdowns on immigration or exports are put into effect.
News reports
Breaking news stories can have an effect on the ASX 200’s value. The extent of the impact will depend on the nature of the reports, but any domestic Australian news that will affect company performance could influence the price of the ASX 200.
Earnings reports
The earnings reports of individual companies listed on the ASX 200 can have a large impact on the price of the index. Since it is a market-capitalisation weighted index, the earnings reports of higher market-cap companies will tend to have the biggest effect on its value.
Interest rate decisions
Interest rate decisions by the Reserve Bank of Australia often cause fluctuations in the price of the ASX 200. Higher interest rates reduce borrowing and can therefore affect earnings growth. As a result, share prices tend to fall – which will cause a reciprocal decrease in the price of the ASX 200.
Strength of AUD
The strength of the Australian dollar will have an effect on the price of the ASX 200. If AUD is stronger compared to other currencies on the forex market, the index will likely rise in value, and if AUD is weaker, it will likely fall.
Price of commodities
Since the strength of AUD is tied to the value of Australia’s exports, the value of commodity metals such as copper or gold will affect the price of the ASX 200 – either positively or negatively – depending on whether the price for these commodities is increasing or decreasing.
Hone your ASX 200 strategies
- Choose a trading style: There are many trading styles to choose from, including scalping, day trading and swing trading. The one that’s right for you will depend on your individual preferences
- Study charts and price action: Chart analysis will help you to gauge previous market sentiment, while price action helps you to make an assessment about what a market might do next
- Carry out your own technical analysis: This involves using indicators to identify patterns and trends on price charts. A wide range of indicators are available on the IG trading platform
- Use ASX trading signals: Trading signals notify you when certain conditions are met – for example, when the ASX 200’s price increases by a certain amount of points
- Follow the news: Reports and breaking announcements about the economy or individual companies can help form the basis of your trading decisions. Many traders pay particular attention to company earnings reports and interest rate changes
Discover what else you need to know about the ASX 200
The ASX 200 is the benchmark share index for the Australian market. It includes 200 large-cap Australian shares from a range of different sectors, including finance, healthcare, industry, energy and manufacturing.
How is the ASX 200 calculated?
The ASX 200 is a market-capitalisation weighted index, which means that the performance of companies with a larger market cap will have a greater influence over the index’s price.
What are the ASX 200 trading hours?
The trading hours of the ASX 200 will depend on whether you are seeking to get exposure to the market through trading or investing. For example, we offer 24-hour CFD trading on our Australia 200 index from 8am on Monday until 7am on Saturday (AEST)*.
| CFD trading open (AEST)* | CFD trading close (AEST)* |
8am Monday |
7am Saturday |
*Times listed are affected by AU clock changes in the year, and will be adjusted by +/- 1 hour accordingly.
Did you know, we are also one of the only providers to offer certain indices on the weekend, meaning that you can trade or hedge when other traders can’t? Our weekend indices offering includes global markets such as Wall Street Cash, UK 100 Cash, Hong Kong HS50 and the Germany 40 Cash.
Aside from CFD trading, we also offer share trading on a range of ASX-listed shares and ETFs – meaning you can invest in shares directly. Our share trading hours on ASX 200-listed shares can be seen below.
| Share trading open (AEDT)* | Share trading close (AEDT)* |
10am |
4pm |
*Times listed are affected by AU clock changes in the year, and will be adjusted by +/- 1 hour accordingly.
We also offer shares from many different locations around the world including the US – with extended hours on over 70 US shares – as well as the UK, Asia and Europe.
FAQs
How can you trade the ASX 200 with CFDs?
You can trade the ASX 200 with CFDs, which are financial derivatives that mirror the underlying market price of the ASX 200 index. CFDs can be used to go long and speculate on the price of the ASX 200 rising, or you can go short and speculate on the price falling.
They are also an effective way to hedge risk in any of your existing ASX 200 positions, such as if you have directly invested in ASX 200 shares or an ASX 200 ETF.
For example, if you thought that one of your share investments was going to decline in value for a short time, you could open a short CFD position. In a hedge, the profits on your short CFD position would offset a proportion of the losses on your share investment if the market dropped.
What should you know before trading the ASX 200?
Before you trade the ASX 200, you should carry out your own fundamental analysis of the constituent companies’ performance, the government’s economic policy and current economic conditions, and technical analysis of the index’s previous price movements.
How do companies get into the ASX 200?
The ASX 200’s constituents are the 200 largest companies that are listed on the Australian Securities Exchange. Because the largest companies are always changing, the companies which make up the ASX 200 are constantly reviewed, and the most recent composition of the ASX 200 is posted every night on the ASX website.
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1 If Australian-listed, there is a standard rate of A$8 or 0.1% (whichever is higher) for 0-2 trades in the previous month. 3+ trades in the previous month = A$5 or 0.05%.
