<p>The <strong>Leveraged Loan Index (LLI)</strong> is a benchmark that tracks the performance of the leveraged loan market. It's a key indicator for investors and traders, reflecting the risk and return dynamics of this segment of the credit market.</p>

<h2>How It Works</h2>
<p>The LLI is calculated by the Financial Times Stock Exchange (FTSE) using a market value-weighted methodology. It includes U.S. dollar-denominated, senior secured leveraged loans that are rated below investment grade (BB+ or lower) by Moody's, S&P, or Fitch. The index rebalances quarterly to maintain its representativeness.</p>

<h2>Why It Matters for Traders</h2>
<p>The LLI matters for traders for several reasons:</p>
<ul>
  <li>Risk Assessment: It helps traders evaluate the risk appetite of the market and the potential impact on their portfolios.</li>
  <li>Performance Benchmark: It serves as a benchmark for the performance of leveraged loan funds and other credit strategies.</li>
  <li>Trading Opportunities: Fluctuations in the LLI can signal opportunities for trading in the leveraged loan market or related instruments, such as <strong>CFDs</strong> or <strong>ETFs</strong>.</li>
</ul>

<h2>Example</h2>
<p>Let's say a trader is using the <strong>MetaTrader 5</strong> platform to trade CFDs on the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD). A rise in the LLI could indicate a potential increase in risk aversion, leading to a sell-off in corporate bonds. The trader might then decide to short LQD CFDs to capitalize on this potential price movement.</p>

<h2>Key Takeaways</h2>
<ul>
  <li>The Leveraged Loan Index (LLI) tracks the performance of the leveraged loan market.</li>
  <li>It's calculated using a market value-weighted methodology and rebalances quarterly.</li>
  <li>Traders use the LLI to assess risk, benchmark performance, and identify trading opportunities.</li>
</ul>