What is the XJO?

[lukelee]

Hi, sorry about this stupid question, I am a newb.

e.g.
http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&asxCode=rrl
on the chart there is a xjo - daily line chart. what is it?

thanks in advance

 

[Timmy]

Re: what is xjo?

The XJO is the S&P/ASX200 Index.

Bit of a run-down here:http://en.wikipedia.org/wiki/S&P/ASX_200

 

[Wysiwyg]

Re: what is xjo?

The XJO is the S&P/ASX200 Index.

Bit of a run-down here:http://en.wikipedia.org/wiki/S&P/ASX_200

Just wondering how the point value is calculated for an index. I read that

The ASX 200 is market-capitalization weighted meaning that a company's contribution to the index is relative to its total market value i.e. share price x number of tradeable shares.

So if companies that make up the index determine the point value, how can index traders influence the point value? What exactly are we trading?

 

[cutz]

Re: what is xjo?

What exactly are we trading?

The index in a nice little package, http://www.asx.com.au/products/futures/index_futures/product_description.htm .

 

[Wysiwyg]

Re: what is xjo?

The index in a nice little package, http://www.asx.com.au/products/futures/index_futures/product_description.htm .

Yes thanks for that. So a futures contract index point value is determined by other futures contract buyers and sellers. Who are in turn driven to buy or sell contracts in reaction to the underlying index movement.

What I meant was the cash market index contracts that CFD providers have. They use the XJO as the index and it is point for point but the contracts are tradeable off that index movement.

 

[alphaman]

The index is calculated by S&P. You can find the methodology on their website. Expect a long read.

 

[Wysiwyg]

Re: what is xjo?

No worries. I'll do research on the differences between cash market and futures market.

Futures vs Cash Market

It is important to distinguish cash market from futures markets when looking at a particular commodity. Many people do not realize that there is a difference between the two.

 

[weird]

What are CFDs ?

Do any of them actually have a decent trading platform compared to IB ?

Just joking towards CFDs ... just don't wish to touch them ... too many opportunities elsewhere.

Rather trade futures or US if wanting to go short.

 

[Wysiwyg]

What are CFDs ?

This is the ASX CFD Contract specs. for the S&P/ASX 200 which never expires.

 

[Wysiwyg]

So in the wash up, contracts don't move the XJO. The trading of the stock that make up the index moves the XJO. The derivatives markets of this index are then sold or bought via contracts exchanged with one another. For example the SFE SPI.