eToro Hang Seng China 50 Trading

Introduction

The Hang Seng China 50 index, also known as China 50 index or HKG50, measures 50 of the largest Chinese companies listed on Hong Kong and mainland China stock exchanges.

eToro is an online investment platform where you can find the HKG50, one of its popular assets under the "Indices" category. It may feel daunting to trade it as a beginner, but we're here to help. Our latest article covers all the basics you need to know so have a read here! We hope this will make your trading with HKG50 easier.

History of Hang Seng China 50

The Hang Seng Index has been published since 1969 by a subsidiary of Hang Seng Bank. The China 50 Index takes a cross-market approach to capture investment opportunities created by exposure to a broad China investment universe. The index aims to capture the Hong Kong exchange's leadership and covers approximately 65 percent of its total market capitalization.

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This index is the most widely followed indicator of the Hong Kong economy. Furthermore, because Hong Kong is a Chinese special administrative territory, the two economies are deeply linked, with numerous Chinese companies listed on the Hong Kong Exchange.

Factors to Consider When Trading Hang Seng China 50

Having access to Hong Kong's largest and most liquid companies can be challenging, but considering several factors, it can increase trading success. However, before trading in Hang Seng 50, you need to take note that this index is volatile as fluctuations in the Chinese Yuan can affect the prices due to the proximity of Hong Kong to China.

The economic and political changes in China can also affect price movements because Chinese companies dominate this index. Traders should bear in mind that when trading in the HKG50, they should keep a close eye on the market and economic developments

How to Trade Hang Seng China 50?

The Hang Seng 50 index represents Hong Kong's major exchange companies and covers almost 65% of its total market capitalization. Hang Seng 50 is a way to gain exposure without deeply analyzing the performance of individual companies. The Hang Seng Financial index typically provides traders with high liquidity, extended trading hours, and tight spreads.

If you want to expose yourself directly to Hang Seng 50's price movements, you may choose to trade rather than invest. You can trade the index via CFDs and ETFs, which enable it to speculate on upward or downward price movements, which means you can monitor the profits and losses. The Hang Seng 50 index is based on a basket of individual companies, and your share prices will have an impact on the index throughout the trading day.

Trading Hang Seng China 50 via ETFs

Trading in an HS50 ETF can essentially spread your capital out across all fifty (50) Hang Seng 50 companies. You can capitalize on short-term price movements on the Hang Seng 50 by trading an ETF that imitates the index's compositions. If you want to invest in the Hang Seng 50, you can buy shares in ETFs that track the index's price or shares of individual constituents.

Like stocks, ETFs could trade on exchanges, but they follow an underlying asset or basket of assets. You can profit from selling your assets after the share price goes up and receive dividend payments if made. Investments need the absolute position's worth to be paid upfront as you acquire ownership of the underlying assets.

Trading Hang Seng China 50 via Futures

The rising demand of the Hong Kong stock market and other financial hedging tools led the Hong Kong Futures Exchange (HKFE) to establish HSI futures. However, unlike other futures, the Hang Seng cannot be exchanged for an underlying physical asset because an index is simply a number representing the stocks of the top 50 companies.

HSI futures aims to protect the investor's finances from a risky situation, especially during high volatility. It offers Lower transaction costs than stocks as the contracts are being traded on a margin basis. Moreover, only one commission is responsible for establishing and liquidating a contract, so they do not have to pay multiple transaction fees.

Trading Hang Seng China 50 via CFDs

Anyone who want to invest in HKG50 index can do it by trading through investing in CFDs. Through CFDs, a derivative or financial contract, those top 50 companies comprising HKG50 can now be accessed by traders worldwide by purchasing the stock at a specific time and price.

With the CFDs, it will enable you to enjoy the benefit of cost efficiency and to have the ability to manage risk while seizing the arbitrage opportunities present in the said index, while also reaping convenience since, under CFDs, the ownership is not transferred to the CFD broker.

Trading Hang Seng China 50 CFDs with eToro

eToro is the most widely recommended broker for investing in the Hang Seng Index. You can purchase shares inside the Hang Seng Index or the Hang Seng Index itself without paying any fee. Although eToro does charge a modest spread, this is usual practice for brokers and is relatively affordable.

eToro also allows you to invest in individual stocks inside the Hang Seng Index. You can purchase fractional shares for as low as so you are not required to make a significant initial investment. For instance, you can begin by investing a little sum in Tencent Holdings, one of the Hang Seng Index's largest companies. You may then progressively raise your stake over time while incurring no fee.

How to Trade Hang Seng China 50 in eToro?

1. Create an account on eToro or log-in your account for existing users.

   

2. Click "Discover".

   

3. Select "Indices".

   

4. Look for "HKG50".

   

5. Select BUY or SELL.

   

6. Key in your desired amount to invest or the number of HKG50 units you want to trade.

   

7. Review and set the stop loss, leverage, and take profit parameters.

   

8. Select "Open Trade".

   

Is It Wise to Invest in Hang Seng China 50?

Traders like the Hang Seng 50 index because it exposes them to substantial market price volatility and daily changes. The HKG50 is known for its high volume and volatility compared to other major indices. It attracts many day traders looking to profit from short-term price movements, which is one of the significant reasons to consider investing in the Hang Seng 50.

When it comes to economic growth, China is the world's most dynamic region. While it may be reasonable to benefit on that growth by purchasing individual stock shares, buying the Hang Seng index of Hong Kong stocks may be a more reliable approach to stay up with that growth. The index has recently come close to breaking its record high set more than ten years ago. Anyone can tap into this market but it is also essential to be mindful of the associated risks.

Currently, Hang Seng Index dropped from its record of six-week high amid China's political and economic slowdown concerns which disappointed traders due to policy easing this October. The HK50 also lost 1153 points or 4.23% of their record since the beginning of 2021. However, HK50 has participated in a long history of solid execution, filling in esteem by over 20,000% since 1964.