How to trade or invest in the ASX 200

ASX 200 ETFs

When you trade in an ASX 200 ETF, you’re buying shares in a fund that tracks the performance of the ASX 200. Trading in ETFs enables you to get exposure to the ASX 200 with a single transaction, rather than buying a range of individual constituent shares.

Commission on ASX 200 begins at 0.10% per side of a CFD trade, with a minimum fee of AUD8 for online orders. With ETFs, you will be trading on the cash (spot) price, so there are funding charges you could incur if you leave your position open overnight.

To open a ASX 200 ETF position:

1. Go to the CFD trading platform
2. Select ‘ETFs’
3. Click on your chosen ETF
4. Decide whether you want to buy (go long) or sell (go short)
5. Choose your deal size in terms of number of shares
6. Set yours stops and limits
7. Click ‘place deal’ to open your position

Index futures CFDs

You can also get exposure to the ASX 200 by trading the Australia 200 index futures CFDs with IG. 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.

To open a ASX 200 futures position:

1. Go to the CFD trading platform
2. Select the Australia 200 under ‘Indices’
3. Choose ‘Futures’ instead of ‘Cash’ to trade and select your preferred date range
4. Decide whether you want to buy (go long) or sell (go short)
5. Choose your deal size in terms of number of contracts
6. Set yours stops and limits
7. Click ‘place deal’ to open your position

Cash index CFDs

You can get exposure to the ASX 200 by trading the Australia 200 Cash index CFD with IG. This means that you’re dealing 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.

To open a Australia 200 spot position:

1. Go to the CFD trading platform
2. Select the Australia 200 under ‘Indices’
3. Choose ‘Cash’ instead of ‘Futures’ to trade and select your preferred contract value
4. Decide whether you want to buy (go long) or sell (go short)
5. Choose your deal size in terms of number of contracts
6. Set yours stops and limits
7. Click ‘place deal’ to open your position

Options

You can also trade on ASX 200 using options. With options, you have the right but not the obligation to exercise the contract on or before its expiry date. To trade options using CFDs, you will pay an initial deposit or premium to open a position. You’ll then speculate on the option’s premium for a profit or loss – but note that both can significantly outweigh your deposit amount. This is because profits and losses are calculated on the full position size, not the premium amount, so ensure you trade wisely.

Remember, buying options is limited risk as you’ll only risk as much as your margin paid, but selling options is technically unlimited risk, as there’s no restriction to how much a market’s price can rise.

*Do note that CFD options are opt-in only.

To open a CFD options position on the ASX 200:

1. Go to the CFD trading platform
2. Click on ‘Options’ instead of ‘Indices’
3. Choose ‘Indices’ as your asset class and select the Australia 200
4. Decide on your preferred maturity date range – daily, weekly or monthly
5. Select a call or put option, and whether you want to buy (go long) or sell (go short)
6. Choose the size of your position
7. Set your stops and limits
8. Click ‘place deal’ to open the position

FAQs