What is the S&P/ASX 200?
The S&P/ASX 200 is Australia's leading institutional investable stock market index, tracking 200 of the largest and most liquid stocks listed on the Australian Securities Exchange (ASX). Launched in 2000, it is weighted by float-adjusted market capitalisation, so larger companies generally have a greater influence on its movements. The index is calculated in real time in Australian dollars and rebalanced quarterly.
Its constituents include major Australian companies such as BHP Group (BHP), Commonwealth Bank of Australia (CBA), National Australia Bank (NAB), Wesfarmers (WES), CSL Limited (CSL), Rio Tinto (RIO) and Woodside Energy (WDS), providing exposure to sectors including financials, materials, healthcare, consumer and energy.
Why trade the ASX 200?
The ASX 200 offers a way to gain exposure to a broad group of Australia's largest and most liquid listed companies through a single index.
Rather than analysing 200 individual companies, traders can focus on the broader factors influencing Australian shares, including monetary policy, economic conditions, commodities, financial markets and global sentiment.
The index also provides a useful market benchmark. Its movements can offer insight into the overall direction and sentiment of Australia's large-cap equity market.
ASX 200 sectors
The ASX 200 provides exposure to a range of industries. Financial companies have historically played an important role in the index, alongside materials, healthcare, energy, consumer and other sectors.
For example, financials include major banks such as CBA, NAB, Westpac and ANZ, while the materials sector includes companies such as BHP and Rio Tinto. Healthcare exposure includes CSL, while Woodside provides exposure to the energy sector and Wesfarmers to the consumer segment.
Interest-rate decisions, commodity prices, the Australian dollar (AUD), global market sentiment and developments affecting banks and resource companies can all contribute to changes in ASX 200 prices.
ASX 200 vs individual shares
Trading the ASX 200 provides exposure to the broader performance of a basket of large Australian companies, rather than relying on the performance of a single stock.
For example, an individual share such as BHP may be affected by developments in commodities and mining, while CBA and other major banks may be more sensitive to interest rates, lending conditions and the Australian economy. CSL can respond to developments affecting the healthcare and biotechnology industries.
By trading the ASX 200, traders can instead take a view on the direction of the broader Australian large-cap equity market.
Long vs short ASX 200 trading
When trading the ASX 200 through a Contract for Difference (CFD), you can take either a long or short position, depending on your view of the market.
Going long means you are taking a position that the ASX 200 could rise. If the index moves higher, the position may generate a profit, before applicable costs. If the index moves lower, the position may incur a loss.
Going short means you are taking a position that the ASX 200 could fall. If the index declines, the position may generate a profit, before applicable costs. If the index rises instead, the position may incur a loss.
CFDs allow traders to speculate on both rising and falling markets without owning the underlying index constituents. However, CFDs are leveraged products, meaning gains and losses can be magnified. It is important to understand leverage, margin and the costs associated with trading before opening a position.
What moves the ASX 200?
The ASX 200 can be influenced by the Reserve Bank of Australia (RBA) interest-rate expectations, economic conditions, commodity prices and developments affecting major sectors such as financials, resources and energy.
Global market sentiment, movements in the Australian dollar and company-specific developments such as earnings, dividends and corporate announcements can also influence the index. As the ASX 200 includes companies with significant international operations, global economic and market developments can also feed through to Australian equities.
Explore Direct Market Access (DMA) trading
DMA is a form of execution where orders are sent straight to the underlying exchange's order book, rather than being filled internally by a broker. This gives traders a genuine exchange price feed, full market depth, and live order flow, so pricing reflects real supply and demand rather than a broker-generated quote.
With FP Markets, traders can apply this DMA model to the ASX 200, gaining direct access to the underlying shares that make up the index via the IRESS and Mottai platforms. Both provide a genuine Level 2 ASX price feed and route orders straight to the market, allowing traders to build direct exposure to individual ASX-listed companies alongside their index-level positioning.
Trade ASX 200 & global indices
Alongside the ASX 200, FP Markets offers access to major global indices, including the S&P 500, Nasdaq 100, Dow Jones, FTSE 100, DAX 40, Nikkei 225 and Hang Seng.
Explore the full range of index markets available with FP Markets.