Top Nikkei 225 Stock Index Trading Platform

How to Trade Nikkei 225?

An important index of the Japanese stock market is the Nikkei 225. This index examines the performance of 225 of Japan's largest companies. The index includes a wide range of sectors, making it a useful financial tool for a diversified investor. Trading the Nikkei 225 exposes you to the Tokyo Stock Exchange.

What is the Nikkei 225?

The 225 largest Japanese companies listed on the Tokyo Stock Exchange are tracked by the Nikkei 225 stock index. Because of its broad coverage, the index is a crucial indicator of the health of the Japanese market. The Nikkei 225 Index was established in 1950, with a value of 250 points. It differs from the majority of Asian financial sector stock indices, which are calculated based on market capitalization, as it is a price-weighted index.

The Companies in the Nikkei 225

• The Nikkei 225 Index covers a variety of Japanese market segments. Fast Retailing, SoftBank Group and Tokyo Electron are the three largest companies in this index by weight.
• NGK Spark Plug Co. was also added to the Nikkei 225 Index in October 2020. The list also includes Sony Corp, Canon Inc, Panasonic Corp, Mazda Motor Corp, Toyota Motor Corp and other well-known Japanese companies.
• The index covers a range of segments of the Japanese financial market. The companies included in this index are engaged in the production of capital goods, consumer products, financial services, materials and transportation services.

Nikkei 225 Trading Hours

The companies that make up the Nikkei 225 Index are listed on the Tokyo Stock Exchange (TSE). The TSE is Japan's largest stock exchange, and it operates Monday through Friday, just like other exchanges around the world. The trading hours for the Nikkei 225 are from 9:00am to 11:30am and from 12:30pm to 3:00pm (GMT +09). These hours cover five trading days per week. A trader has the opportunity to trade futures and contracts for difference in addition to trading the index in the cash market. By doing so, he can have access to trading the Nikkei 225 after the TSE closes.

Benefits of Trading the Nikkei 225

• Extensive historical data aids in forecasting performance.
• Diversification across various industries through a single index.
• High volatility for short-term trading opportunities.
• Decent average annual returns of 12%.
• High liquidity enables easy entry and exit.

Disadvantages of Trading the Nikkei 225

• Influence of companies with higher stock prices on the index.
• Dependence on foreign exchange rates and yen strength.
• High volatility can lead to significant price fluctuations.

Trading the Nikkei 225

Trading the Nikkei 225 can be done in a variety of ways. Depending on the requirements and preferences of the trader, several trading instruments can be used. Here are some of the different strategies for trading the Nikkei 225 index:

• CFDs on the Nikkei 225
• Futures Contracts on the 225 Nikkei
• Options on the Nikkei 225
• ETFs on the Nikkei 225

3 Best Brokers for Trading Nikkei 225

1. Pepperstone - Best Overall Broker for Trading Nikkei 225.

   Pepperstone is highly regarded for providing a robust trading environment for Nikkei 225 traders. With competitive spreads, advanced trading tools, and fast execution speeds, Pepperstone stands out as an excellent choice for both novice and experienced traders.

2. Plus500 - Best Broker with Multiple Licenses.

   Plus500 offers a secure and user-friendly platform for trading Nikkei 225. With numerous regulatory licenses and strong investor protection measures, Plus500 is ideal for traders seeking a reliable platform for various financial instruments.

3. XM - Best Platform and Excellent Brokerage for Beginners.

   XM excels by offering extensive educational resources and practical online workshops to support Nikkei 225 traders. Its user-friendly interface and comprehensive support make XM a great choice for beginners.

FAQs

• Trading Hours: Monday to Friday, 9:00am to 11:30am and 12:30pm to 3:00pm (GMT +09:00).
• Volatility: Considered one of the most volatile indices in developed markets.
• Weighting: Price-weighted average index comprising the top 225 Japanese companies.
• Linked Indices: Linked to major indices like the Dow Jones.