Top FTSE 100 Stock Index Trading Platform

How to invest in FTSE 100?

One of the best-known market indicators for investing in British companies was developed in 1984 as a result of a collaboration between the London Stock Exchange and the Financial Times of London.

The FTSE 100, an index that measures the performance of the British stock market, is managed by a newly formed company, the FTSE Group (Financial Times and Stock Exchange Group).

You'll learn about how the FTSE 100 Index works, current FTSE 100 companies and a FTSE 100 trading technique you can use right now in this article.

What is the FTSE 100 Index?

The 100 largest companies by market capitalization listed on the London Stock Exchange make up the FTSE 100 Index, sometimes called the Footsie (LSE). The FTSE Group manages the index and during LSE trading hours, from 8:00 a.m. to 4:30 p.m. UK time, prices are updated every 15 seconds.

The S&P 500 and Dow Jones 30 indices on the U.S. stock exchange are comparable to the FTSE 100 index in the U.K. The total market value of the companies that make up the index is used to determine its price. When the index rises, it means that more companies are gaining value - but not necessarily all.

Trading the FTSE 100 Index: A Guide

1. Create a new account.

   With Plus500, you can build an income-generating portfolio by investing in UK companies that are part of the FTSE 100 Index and earning dividends. ETFs (exchange traded funds) that track the performance of the FTSE 100 index are another investment option.

   You can also trade CFDs (Contracts for Difference) on the FTSE 100 Index and UK stocks using this broker. Through the use of leverage, this product allows you to trade long and short and possibly take advantage of rising and falling markets.

2. Choose an instrument.

   Trade CFDs on the FTSE 100 index and over 200 of the UK's leading companies. Over 4,000 different products are available for CFD trading, including stocks, currencies, commodities and global stock market indices.

3. Make a trade!

   With Plus500, you can use a variety of free premium analytical tools to trade and invest on the MetaTrader 4 and MetaTrader 5 platforms for desktop, online and mobile.

FTSE 100 Companies: Who are they?

Since the FTSE100 was introduced in 1984, the list of companies that make up the FTSE100 has changed due to growth and decline in market capitalization, mergers and acquisitions, and other factors. Many people also believe that all companies in the index must be British, when this is not true - it is sufficient that the company is listed on the London Stock Exchange. In reality, many companies are internationally based and derive the majority of their revenues from abroad.

Investors around the world are familiar with several companies, such as HSBC, Barclays, BP, GlaxoSmithKline, etc. Compass Group, a company that specializes in food services only in the UK and Ireland, may not be as well known to investors outside the UK.

So which companies make up the FTSE 100? Shell, AstraZeneca, HSBC, Unilever, GlaxoSmithKline, Diageo, BP, British American Tobacco, Rio Tinto and Glencore are now among the top ten companies in the FTSE 100 by market capitalization. The full list is available on the FTSE 100 webpage on the London Stock Exchange website.

What influences the price of the FTSE 100?

• Economic developments, such as the Brexit, can significantly affect the price of an index. The FTSE 100 has tended to move against the pound since the 2016 vote.
• Changes in exchange rates can impact the price of the FTSE 100, as many of its participants derive a significant portion of their revenue from overseas.
• Press Releases - Depending on the press release, the market will often experience volatility. The price of the index may change if the news affects any of the sectors or components that make up the FTSE 100.
• Earnings reports - Depending on the weight of the company, adjustments to the values of the FTSE constituents can have a significant effect on the index price.
• Commodity prices - Approximately 15% of the companies in the FTSE 100 trade in commodities, so changes in their prices can have a significant impact on the index price.

Strategies for Trading the FTSE 100

• Choose your trading approach: Scalping, day trading, swing trading and position trading are the four basic types of trading. Each trading strategy defines how often you trade and how long you keep your trades open.
• Analyze charts and price movements: Price action can help you get an idea of what the market might do next, while daily and weekly charts can help you gauge the mood of the market.
• Use technical analysis and indicators: Using technical analysis and trading indicators as part of your trading strategy can help you spot certain market signals and trends.
• Find FTSE trading signals: You should be able to determine if the FTSE 100 is in a trend by looking at the chart. With momentum indicators like the Stochastic Oscillator or RSI, you can check for trading signals.
• Set up trading alerts: Trading alerts allow you to specify requirements for the FTSE 100 price and be alerted immediately when these requirements are met.
• Read the news: Stock prices can change when company news, such as earnings, is announced. To help you trade based on the most recent events, keep a close eye on the economic calendar.

FTSE 100 Calculation and Trading Hours

The FTSE 100 index represents the top 100 companies listed on the UK stock exchange and is a popular method of understanding the UK stock market and tracking the state of the UK economy.

How the FTSE 100 is Calculated

Dividing the market capitalization of all stocks listed on the London Stock Exchange (LSE) by 100 gives the FTSE 100. The index includes the top 100 companies by market capitalization. Higher weighted stocks have a greater impact on the price of the FTSE 100 than lower weighted stocks. Companies with a larger market capitalization will have a higher weight in the index.

What Time is the FTSE 100 Traded?

The FTSE 100 is traded from 4pm to 12am (UTC +8) 5 days a week.

FAQs

What trading options are available for the FTSE 100?

CFDs, a type of financial derivative that mirrors the underlying market price of the FTSE 100 index, can be used to trade the index. Using Plus500 CFDs, you can take a long position and bet on the price of the FTSE 100 going up or a short position and bet on the price going down.

What information is important to have before trading the FTSE 100?

Ensure you have a solid understanding of trading concepts and consider using a demo account to practice.

How can companies join the FTSE 100?

To be included in the FTSE 100, a company must be listed on the London Stock Exchange (LSE) and rank among the top 100 in market capitalization.