Questions about Nikkei 225 Trading
What is Nikkei 225?
The Nikkei 225 is Japan’s pre-eminent stock index, and tracks the top 225 most respected and valuable companies that are listed on the Tokyo Stock Exchange. The Nikkei 225 is compiled and maintained by Nihon Keizai Shimbun. The Nikkei 225 comprises securities from a wide range of sectors including foods, automotive, manufacturing, chemicals, fishery, construction, mining, pharmaceuticals, retail, real estate, machinery, securities and insurance.
Nikkei 225 history
The Nikkei 225 was launched on September 7, 1950, and until the Japanese economic bubble throughout the 1980’s it progressed in a relatively normal manner. However, in the 80’s Japan’s economy ballooned so that stock prices and land values tripled from 1985 to 1989, with the Tokyo Stock Exchange accounting for 60% of global market cap. Unlike other stock averages which typically grow at a steady exponential rate, the Nikkei reached its peak all time high on December 29, 1989, wherefrom then on afterwards it spent the next 20 years retracing back to just about 7,000 points in March 2009.
What is the Nikkei 225 composite index made up of?
The Nikkei 225 is composed of firms from all sectors of the Japanese economy, including major Japanese auto brands like Mitsubishi, Honda, Nissan and Suzuki, and major Japanese camera companies such as Nikon and Olympus. Being that the Nikkei 225 is made up of such a large number of companies, the coverage of this index includes a minimum of half a dozen of the leading Japanese companies and institutions in any one sector.
What top 10 companies are in the Nikkei 225?
Company | Index Weighting (%) |
---|
Fast Retailing Co., Ltd. | 10.84 |
Softbank Group Corp. | 3.86 |
Tokyo Electron Ltd. | 3.38 |
Fanuc Corp. | 3.36 |
KDDI Corp. | 2.84 |
Daikin Industries Ltd. | 2.37 |
Kyocera Corp. | 2.23 |
Terumo Corp. | 2.19 |
Shin-Etsu Chemical Co., Ltd. | 1.91 |
Familymart Co., Ltd. | 1.82 |
*information as of May 2020Why is the Nikkei 225 Index important to traders?
The Tokyo Stock Exchange is one of the largest and most well-known stock exchanges in the world, and investing into Nikkei 225 derivatives provides access to Japan’s top 225 companies with a single instrument. Although today Japan’s premier index has not recovered to its original peak from the 80’s and 90’s, the Nikkei 225 has reliably provided returns for traders over the past 3 years, and is regarded as one of the leading stock averages in Asia today.
How is Nikkei 225 calculated?
The Nikkei 225 is a price-weighted index. What this means is that the composition of the index is calculated and decided based upon the price of each security in comparison to the prices of all of the other securities in the index. For example, if two stocks trade on the Tokyo Stock Exchange and are included in the Nikkei 225, and the first stock trades at a current price of $5, while the second stock trades at a current price of $50, the second stock will make up 10 times more of the total index compared to the first stock.
Why does trading Nikkei 225 with CFDs make sense?
The Nikkei 225 is a stock index rather than a single company stock which means that the growth of the index is pushed along by over a hundred companies. For traders, this means the risk is mitigated as one company’s poor performance won’t impact the index too much, and when there is a growth in macroeconomic factors, most of the top companies will benefit together realdexfasttrading’s ultra-fast order execution and its stable, reliable trading engine ensures the tightest spreads and best trading experience. The trading platform is packed with advanced trading tools, such as long and short positions, advanced order types such as stop loss and take profit orders. The platform is also safe, secure, and offers 24/7 customer support service via a live chat, community channels, and much more.
What is the best way to invest in the Japanese stock market?
The best way to access the Japanese stock market is through the Nikkei 225 stock index. Trading the Nikkei, however, can be even better and offer additional flexibility over investing.
Is it possible to trade Nikkei 225?
Trading the Nikkei 225 is just one of several stock indices available to trade with long and short positions using realdexfasttrading. The advanced trading platform also offers the Dow Jones, FTSE, DAX, and many more using leverage.
What is the best time to trade Nikkei 225?
The best time to trade the Nikkei is when Japanese traders begin and end their days. There is more volatility during these short periods lasting roughly one hour before daily close and open.
What is Nikkei’s ticker symbol?
Nikkei trades under the NI225 or N225 ticker symbol. On realdexfasttrading, the CFD version of Nikkei traders under the Japan 225 symbol.