Pepperstone Adds Two New CFD Contracts to Its Offering

As Chinese stock market Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term is directly reflected on the Hong Kong stock market, Australian broker Pepperstone has announced that it will start offering a new index to its clients, tracking the performance of shares in the region.

The company has officially added two new CFDs to its offering starting from today, with the Hong Kong 50 (HK50) and the Russell 2000 (US2000).

The Hang Seng 50 measures the performance of the 50 largest companies traded on the Hong Kong Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term. Recent moves on the Chinese stock market have contributed to wild volatility in Hong Kong with the index dropping 20 percent from its double top marked in April and May.

The value of companies tracked by the index constitutes about 60 percent of the total stock market value of firms traded on the Hang Seng Exchange. Major names such as HSBC, China Construction Bank and China Mobile are among its constituents with financials playing a particularly substantial role - close to half of the companies are included in the index.

Pepperstone has also added the U.S.Russell 2000 Index, which represents the value of the 2,000 smallest companies among the top 3,000 U.S. listed firms. With the current valuation of the index approaching 80 times price to earnings ratio, the Russell 2000 arguably has way more potential for volatility than the blue chip stocks in the U.S..

Looking at the Hang Seng 50, the index is currently trading at a price to earnings ratio of about 11, with a dividend yield totaling 3.46 percent.

According to the official Pepperstone announcement, “The HK50 has not followed the exuberance found in mainland China’s indices – staying relatively flat over the last few years; a move higher in April was attributed to investors chasing arbitrage profits, causing inflows from the mainland to relatively undervalued Hong Kong stocks.”