IG also offers exclusive weekend trading hours for the FTSE 100, from 12pm on Saturday to 6.40am on Monday (UTC +8). Commodity prices – Because around 15% of companies on the FTSE 100 are commodity stocks, commodity price fluctuations can influence the index’s price quite heavily. When investing in the FTSE 100, you can buy shares in ETFs that track the price of the index or shares of individual constituents.

Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. With only 5% equity required to open the position, traders must remain aware that they are still exposed to the full value of the position bringing equal potential for profit or loss. Additionally, with CFDs, open futures positions automatically roll over to the next contract. In order to recognize this list as a tradeable instrument, traders must go to a brokerage house who may offer a FTSE100 mutual fund or ETF. Earnings reports – Changes to FTSE constituents’ valuations can have a substantial impact on the index price, depending on the weight of the stock.

trade ftse100

Are you looking to scalp the index, day trade, swing trade, or look for position trades? Next is to study the daily and weekly charts to see the long term direction of the market. This will help inform you whether it is wiser to go long or short the market. Finally look for trading signals based on your favorite technical indicators.

The UK Financial Times Stock Exchange 100 is an index of share prices of the largest 100 companies listed on the London Stock Exchange by market capitalisation. The index was launched on January 3, 1984 at a base value of 1000, and the index level is calculated in real-time. The FTSE 100 is the British blue-chip index and consists of the 100 British companies fxtm broker with the highest market capitalization, the growth of which is reflected in the index. In total, the companies listed in the FTSE 100 represent around 81 per cent of the entire market capitalization traded on the British share market. For this reason, the FTSE 100 and its performance are also regarded as an indicator for the British share market as a whole.

If you were bearish on the FTSE 100, you’d use a put option, which would earn a profit if the index fell in value. FTSE futures are purely speculative – you’d be estimating whether the FTSE will rise or fall by a certain amount by a set date. Option PremiumIs payable by the buyer in full on the business day following a transaction. Matching Algorithm Central Order Book applies a price time trading algorithm, with priority given to first order at the best price. Settlement DateSettlement day is the first business day after the Last Trading Day. AlgorithmPrice-time trading algorithm with priority given to the first order at the best price.

ETFs are traded in a similar way to stocks, but they track an underlying asset or basket of assets. When you trade FTSE 100 ETFs with CFDs, you can get amplified exposure because you’re trading using leverage. Most investors and traders regard the FTSE 100 as the most relevant and key indicator of the United Kingdom’s economy and stock market’s overall status. nordfx review Shares from the largest 100 companies that are listed on the London Stock Exchange make up the FTSE 100 index. The FTSE 100’s value depends on the price of these 100 different stocks. In addition to other tradable assets such as forex, cryptocurrencies, and ETFs this CFD trading platform gives its clients access to stocks with the click of a button.

The free-float adjustment factor essentially helps to account for differences between the number of shares available – usually rounded to the nearest 5%. A company with a larger portion of floating shares will have a larger influence on the index’s value. You can see the trading hours for every single City Index market within the web trading platform, with a free City Index demo. This would give you exposure to just one part of the index, but you could choose just the stocks and sectors you’re interested in. So, if the prices of futures increase, the value of FTSE 100 is likely to open higher, and vice versa. Global shares and risk assets rose on Thursday after the Federal Reserve adopted a more hawkish stance on policy.

Global stocks slide as Chinese data signals slowing economic growth and Delta concerns persist

Head over to the City Index Academy for curated courses designed to get you started on the markets. Institutional investors will often tweak their portfolios based on the latest economic releases. These companies tend not to be domestic facing, which gives the index a negative correlation with pound sterling. There are two types of options you’d use to speculate on the price of the FTSE 100.

The offers that appear in this table are from partnerships from which Investopedia receives compensation. Investopedia does not include all offers available in the marketplace. There are two types of options you’d use to speculate on the price of the FTSE 100. If you’re bullish on the FTSE 100, you’d use a call option – this would earn you a profit if the index increased in value.

Part of this regulation involves verifying its user’s address and identity. On the other hand, the successful distribution of the Covid-19 vaccine means that consumer and business sentiment can eventually resume normality. If you are searching for long-term exposure to the FTSE 100 index then investing in tracker funds may be the best option available. The FTSE 100 cash index covers the actual index price and is typically quoted from your provider. If you want a better gauge of the UK’s domestic economy, you might want to consider the FTSE 250. With more UK-focused firms, it is commonly used instead of the FTSE 100 now.


Companies with a higher market capitalisation will represent a higher weight in the index and stocks with higher weightings have a bigger effect on the FTSE 100’s price. The FTSE 100 is an index of the UK’s largest 100 public companies by market capitalisation. It has become a popular way to gain exposure to the UK stock market and track the performance of the country’s economic health. To make the most of this unique trading opportunity you will need to use the best platform and assets. From our comparisons and analysis, eToro surpasses all expectations as the best 0% commission social trading platform in 2022. Interactive Brokers gives you access to bond and equity indices on heaps of exchanges spanning more than 12 nations.

trade ftse100

There are a number of ways that you can trade the FTSE 100, the most common are derivatives such as CFDs, futures and options, as well as ETFs. All of these instruments enable you to get exposure to all 100 companies from a single position. Over the last ten years, the FTSE 100 has an average annual return of 5.4%. The FTSE 100 index closed just shy of the 7,400 mark, the highest in two months, driven by gains in healthcare, consumer staples, and materials stocks.

Please ensure you understand how this product works and whether you can afford to take the high risk of losing money. Nevertheless, financial experts and investors are adopting bullish sentiments regarding the long-term trajectory of the FTSE 100 index. This can be narrowed down to a range of causes such as the end to the Brexit dilemma. The uncertainty that loomed over the country in terms of the future relationship between Britain and the EU has cleared.

FTSE 100 index trading guide: constituents, market hours and how to trade

This is to make sure the index’s value can be compared to historic data. This number is then multiplied by the company’s ‘free-float factor’, which indicates how many shares are still available on the market. The free-float adjustment factor essentially helps to account for differences between the number of shares available – usually rounded to the nearest 5%. A company with a larger portion of floating shares will have a larger influence on the index’s value. To be included on the FTSE 100, a company must be listed on the LSE, its shares must be denominated in pounds, and it must meet the index’s minimum float and liquidity requirements. London has been stripped of its crown as Europe’s largest stock market after being leapfrogged by Paris as recession jitters hurt UK stocks.

Index futures are popular among longer-term traders because the overnight funding charge is included in the spread – enabling you to hold positions for a long time without this additional cost. Depositing funds into your new trading account is as simple as opening the account in the first place. Simply press the Deposit button at the bottom right-hand side of the screen. One of its best selling points is that this discount broker offers 0% commission for deposits.

  • Another way to trade the FTSE is through exchange traded funds , which are investment instruments that hold a group of stocks – in this case, the shares of constituents on the index.
  • Kelda Group a consortium of investment companies including Citigroup and HSBC.
  • The corrective rally since the 2020 low could be a 2 year triangle or rising wedge which is currently testing support.

In turn, this could have an effect on the entire index’s value, regardless of how many assets there are to offset the decline of a large constituent’s performance. Options- Options contracts are traded on the value of a right to buy, 4xcube review similar to a futures contract. These are highly volatile instruments that offer traders to open positions related to the asset at a potentially lower price. They are tools for advanced traders and you can read more about them here.

List of companies on the FTSE 100

The more the FTSE moved in your chosen direction , the more you’d profit. Constituents of the FTSE 100 are considered ‘blue chip’ firms in the UK, in that they have the highest value. While these companies are often used to measure the UK’s economy, a lot of FTSE 100 constituents are now multinational firms.

Average returns of the FTSE 100

This means that certain countries have access to UK stock CFD trading on a zero-commission basis, whereas other countries have to pay a low average trading commission of around 0.10%. AvaTrade is a global forex and CFD brokerage that has been operating since 2006. In terms of the fundamentals, AvaTrade is regulated by a host of top-tier financial authorities such as ASIC, the FSA, and the Central Bank of Ireland just to name a few. If you don’t know or need a refresher, the spread is essentially the difference between the ask and bid prices of a financial instrument.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. Many investors tend to buy shares outright or trade the FTSE 100 in the long term, which is a strategy known as position trading​​. However, some traders prefer to stick with short-term strategies, such as day trading. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

It is an index that was created by the Financial Times Stock Exchange Group, hence the UK100 or “footsie”, and it is comprised of 100 blue chip stocks listed on the London Stock Exchange. The components of the UK100 represent roughly 80% of the market capitalization of the London Stock Exchange. The index includes the integrated oil & gas companies Royal Dutch Shell and BP, as well as banks HSBC and Barclay’s, and pharmaceutical giants GlaxoSmithKline and AstraZeneca. Cash CFDs have some of the tightest spreads on offer, which have made them popular among day traders who open and close positions quickly. However, holding a position overnight would result in additional charges. So, whether you’re a trader or an investor, if you’re interested in UK stocks, you’ll need to keep an eye on the FTSE 100’s price movements.

Leave a Comment

Your email address will not be published.