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Best US Tech 100 Index Trading Brokers

The world of trading is interesting and protean, having interfaces with different aspects of nowadays economy. Global, local, or industry forecasts would not be well-founded without conducting a detailed professional analysis of the relevant situation. It is here that the indices, which serve to track the overall industry performance, are of great help. Some of them are really indicative since they are affected by factors such as political crises, sectors’ ups and downs, economic shifts, and others.

Being one of the world’s biggest markets, the US has several stock indices related to local companies. While DJIA and S&P 500 extend over multiple industry sectors, US Tech 100 (NASDAQ 100) is somewhat more specialized as it comprises stocks of 100 well-performing companies outside the financial sector, with the prevailing part being major tech firms. TradingPedia compiled the current article with the aim to familiarize you with the basics of US Tech 100 trading as we also present to you ten top-rated trading brokers with their strengths and drawbacks, commissions, spreads, and applicable fees.

How US Tech 100 Trading Works for Traders and Brokers

How US Tech 100 Trading WorksThe US Tech 100 index which is not to be confused with Nasdaq Composite Index falls within the group of modified market-capitalization weighted indices actively traded on the Nasdaq stock exchange. As per the definition given on Nasdaq’s official website, the weighting methodology

“is applied to the capitalization of each Index Security, using the Last Sale Price of the security at the close of trading on the last trading day in February, May, August and November and after applying quarterly changes to the total shares outstanding.”

Traders who wish to start operating with US Tech 100 must first set up an account with a brokerage company that has included the index in its products list. Before the actual trading starts, you have to fund your balance through any of the payment methods supported by the chosen broker. Take a look at the company’s T&Cs since minimum deposit requirements vary within very wide limits, usually between $0 and $300.

As with other indices, it is not possible to directly trade US Tech 100. Trading brokers provide their users with a specific “toolbox” comprising instruments like contracts for difference, futures, and exchange-traded funds through which trades are executed.

Contracts for Difference (CFDs)

Contracts for Difference (CFDs)CFDs on indices are probably the most broadly available US Tech 100 trading tool. They are an excellent option to invest in the price movement without owing part of the index constituents. If a trader’s judgment indicates that the price of US Tech 100 will go up, he can open a “Buy” position. Profit will come in case the index moves above the price level at which the position was opened. Logically, if the index value drops, the trader will suffer a loss.

Top US Tech 100 Trading Brokers

choosing a brokerUS Tech 100, sometimes referred to as Nasdaq 100, is an actively traded stock index that attracts the attention of lots of traders. Although it is considered quite a safe trading product, it does have some level of unpredictability which is why it is of utmost importance to have a thorough understanding of its specifics. Before selecting a trading broker we advise you to carefully examine the trading conditions it offers and decide if the imposed spreads, fees, and commissions are acceptable for you.

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US Tech 100 FAQ

1. What affects the US Tech 100 movement?

The performance of the individual stocks of the highest weighting constituent companies is able to set the direction of the entire index. Furthermore, events with global coverage such as wars and pandemics inevitably have an influence on the stock market sentiment and this leads to an amendment in the value of the US Tech 100.

2. How is the US Tech 100 index calculated?

The shares constituting this stock index are weighted according to market capitalization. The overall US Tech 100 level is the average value of the shares included in it. When calculating the index dividend payments are not taken into account. To be included in the index, companies must have been on Nasdaq for at least 2 years.

3. Is the Nasdaq Composite Index the same as US Tech 100?

This misconception is due to the fact that US Tech 100 is often referred to as Nasdaq 100. In fact, the two indices are quite different, mostly in terms of their scope. As the name suggests, the Nasdaq Composite Index is made up of all international and domestic stocks listed on the Nasdaq Stock Market. For its part, US Tech 100 includes 100 top-tier nonfinancial companies that are traded again on Nasdaq Stock Market.

4. Can I trade US Tech 100 without paying a commission?

The answer is simple, yes, you can. There is an abundance of US Tech 100 trading brokers that allow for commission-free trading mainly through their standard account types. In such cases, the commission is preliminarily included in the spreads thus enabling an easier-to-perform trading process.

5. Is it risky to trade US Tech 100?

Although the index trading market is related to some degree of volatility, price movements are not as significant as the ones with shares for example. If one of the 100 companies in the index experiences hard times this will not significantly affect the overall value. One more example - if you trade shares of a particular company and it goes bankrupt, you will lose 100% of your trading capital. There is no such risk with indices because a company that has become insolvent is automatically replaced by another firm that meets the index inclusion criteria.