Trading on the CAC 40 stock exchange index

The stock exchange index is called the CAC 40. As its name suggests, it is made up of the forty most powerful companies in the country. As for the name of the CAC, it comes from the Continuously Assisted Listing. It is also interesting to note that the companies in question are taken from the Euronext Paris market, which has the 100 largest French companies.

The CAC 40 is currently one of the most interesting indices in the world, and its shares are the most profitable of all the shares on the Euronext market.

Invest in the CAC 40 through CFD:

All the shares listed on the CAC 40 are financial giants. Unlike other indices, such as the Euro Stoxx 50, it is only possible to invest in the CAC 40 using special trading tools, called CFDs. These tools, which are nothing more than contracts for difference, allow investors to increase their profits tenfold in a short time. This means that they will be given the opportunity to generate interesting profits, without having to invest too large a sum. However, at the same time, CFDs also have a multiplier effect on losses. So if traders aren’t careful enough, they risk losing all their invested capital at the snap of a finger.

In addition, the volatility of the CAC 40 price is also an interesting factor to consider. In fact, when learning to trade online, one of the things that comes first is that volatility is the most interesting thing for a trader. In other words, the most volatile stock prices are the main target for all traders. However, here we are talking about a stock index that is made up of several stocks. So as a result it would make sense to find a price that is less volatile.

So why is the price of the CAC 40 index so volatile?

Again, the answer lies in CFDs. As we have indicated previously, these contracts have a multiplier effect. So whether they are winners or losers, the effect of trading on their price will have a significantly more important and therefore visible impact. It is the effect of these investments that creates the CAC 40 price volatility.

It is possible to invest in the CAC 40 from 9:00 a.m. to 5:30 p.m. (local time).

The calculation of the CAC 40 and the selection of the companies that constitute it:

You know that the companies that make up the CAC 40 are those with the most consistent capitalisations on the Euronext Paris market. The selection is made on this market, where we locate the companies with the greatest economic resources. The selection process is carried out every three months, and is done under very specific conditions. In fact, for an action to be part of the CAC 40, your business must be competitive and your results must improve. It is out of the question to include actions from companies in recession, and this is quite understandable. On the other hand, it is imperative that the group has extremely high capitalisation and that it appears on the list of the best in UK.

Each quarter, the last four stocks are likely to be replaced. Obviously it is the four that are placed behind these stocks that will have the opportunity to be part of the index. However, if the performance of these companies is inconclusive, or if they are similar to the stocks to be replaced, the advantage is given to those already included in the index, and they will continue to integrate it throughout the next period.

In special cases, shares of non-French companies may end up in the CAC 40 index.

Why do you have to go through regulated corridors?

The best brokers will allow you to match the performance of professional traders.

What is interesting to note is that with the considerable evolution in the field of computing, it has been possible to develop artificial intelligences that are extremely efficient. Today, it is becoming impossible for massive financial groups to develop without resorting to these tools. Likewise, in the online trading sector, the most efficient brokers use artificial intelligence to offer the best support to their users, and even indicate the best options to follow. We can take the example of the broker Alvexo, which provides its clients with several tools that are based on an automated system and which shows them the best times to invest in the different assets available. This broker even offers detailed trading guides, which will show you how to proceed to carry out your trading operations correctly.

By trading the CAC 40 index, you can benefit from the advantages of margin trading. To get there, simply go to your broker’s official website and review the contracts for the spread. The process involved is simply to forecast and anticipate the growth or decline in price. However, this doesn’t happen without calculation and proper preparation is vital if you want to pursue a career in the cutthroat world of online trading. As you can see, this operation is still similar to standard asset trading where you will need to establish a functional strategy, which is based on factual indications. Of course, you have the option of taking advantage of stop and limit orders to minimize the dangers of using contracts for difference.

By following the basic rules of trading, you can maintain a good return on all your investments. In addition, we strongly recommend that you consult the tutorials that your broker has made available to you. If you work for a successful broker, you will easily get a quality analysis, on which you can base your strategy. In addition, the best online brokers will offer to follow your investments on live stock charts, allowing you to better anticipate future price movements.

When it comes to preserving your capital, this is probably the most important factor to consider when choosing your broker. Therefore, it is essential to inform yourself about this, even before consulting the rates, and other advantages that the broker may present to you. To eliminate the worst brokers from your selection and make your job easier, you can simply check the regulations brokers have. In fact, unregulated brokers should be eliminated immediately, as they are a great risk to your capital.

A broker without regulations can empty your account and you will have no legal means to take them to court.

But where did the idea of the CAC 40 come from?

Of course, as you can see for yourself, CAB stands for Continuously Assisted Listing. This concept comes to us from the Paris Stock Exchange and indicates the basic characteristics from which it is distinguished, including continuity. It was towards the end of the 1980s that the CAC 40 was designed. Initially, its value was set at one thousand, and its capitalisation was 369,436,43294 francs, and its record exceeded the 7,000 mark, just after the famous Dot Com bubble. The latter took place in the spring of 2000.

How does the index vary and according to what?

Due to its complexity, and the fact that it is composed of shares from various groups acting in different sectors, the price of the CAC 40 still depends on several factors. In fact, depending on the shares and the variation of their prices in the market, the price of the index can vary in several possible ways. For example, the performance of companies specialised in the energy sector has an undeniable impact on this price, as they are among the most highly capitalised companies. Therefore, if the share of one of these companies were to lose value, the price of the CAC 40 could only follow. This is a good way to help you better anticipate their evolution. At the same time, the prices of raw materials, such as oil and fuel, can significantly affect the index.

Similarly, we can cite the example of the company Airbus, whose participation is part of the CAC 40, at this time. As prestigious as it is, this action has always had to deal with strong competition from its US competitor, the Boeing group. During the previous years, and until 2009, the Airbus SE share struggled to recover. The competitiveness of its rival Boeing was simply too powerful and the French company was struggling to find new markets.

However, from the early 2000s onwards, he was able to follow a better trading strategy and his share price has been gradually increasing. Better still, with the recent technical failures experienced by Boeing’s aircraft, more and more clients are turning to the Airbus group. This explains, among other things, the impressive growth of the share price on the stock market. Obviously, this growth can also be seen in the price of the French index, and plays an important role in its current growth.