The FTSE 100 index is the London Stock Exchange’s main index. The basis of this index is a price of the 100 companies’ stock with the highest capitalization on the London Stock Exchange. According to some estimates, these companies account for 80% of the total market capitalization of all companies included in the list of the London Stock Exchange.
Though the FTSE 100 index or “footsie” as some traders call it is owned by the Financial Times and the London Stock Exchange, “FTSE” is nolonger an acronym or initialism used to stand for “Financial Times Stock Exchange”. Actually, “FTSE” is a hybrid “borrowed” from the two mother companies.
The FTSE 100 is maintained by the FTSE Group, the limited company established as a joint venture between the Financial Times and the London Stock Exchange.
The index is calculated on a real-time basis. It’s updated every 15 seconds.
As the index contains the largest companies, it is the embodiment of the UK economy.
The FTSE 100 index includes the companies like BHP Billiton, Barclays, Carnival, Rolls-Royce Holding… Here is the complete list of all companies constituting the index:
- 3i Group
- ARM Holdings
- Admiral Group
- Anglo American
- Associated British Foods
- Autonomy Corporation
- BAE Systems
- BG Group
- BHP Billiton
- BT Group
- British American Tobacco
- British Land Company
- British Sky Broadcasting Group
- Burberry Group
- Cairn Energy
- Capita Group
- Capital Shopping Centres Group
- Compass Group
- Essar Energy
- Eurasian Natural Resources Corporation
- Glencore International
- HSBC Hldgs
- Hargreaves Lansdown
- Imperial Tobacco
- InterContinental Hotels Group
- International Power
- Intertek Group
- Johnson Matthey
- Land Securities Group
- Legal & General Group
- Lloyds Banking Group
- Man Group
- Marks & Spencer
- Wm Morrison Supermarkets
- National Grid
- Old Mutual
- RSA Insurance Group
- Randgold Resources
- Reckitt Benckiser Group
- Reed Elsevier
- Rio Tinto Group
- Rolls-Royce Holding
- Royal Bank of Scotland Group
- Royal Dutch Shell A
- Royal Dutch Shell B
- Sage Group
- J Sainsbury
- Schroders N/V
- Scottish & Southern Energy
- Serco Group
- Severn Trent
- Shire Pharmaceuticals Group
- Smith & Nephew
- Smiths Group
- Standard Chartered Bank
- Standard Life
- TUI Travel
- Tullow Oil
- United Utilities Group
- Vedanta Resources
- Vodafone Group
- WPP Group
- Weir Group
- Wood Group (John)
As the FTSE 100 index includes so many companies, forecasting must involve the current state of business of all these firms. This requires a great deal of patience and tough-mindedness from a trader.
The impact of a company share price change is calculated under the following formula: we multiply a number of released shares by a certain company and their price change together, and divide the product by the index divisor.
If we let x equal to the number of shares, y equal to the price change, and take z as the divisor, we get the following formula (x*y)/z.
Despite difficult computation, the FTSE 100 index is rather attractive. To forecast rise or fall, you do not necessarily need to consider each company’s state of business. You can do your forecast just on the basis the UK and global economy.
This index leans on the global financial market as it correlates with the basic indicators of the leading countries. The point is that the cost of the UK companies stock depends largely both on the British and European economies. That’s why we can draw a conclusion that the given index also directly depends on the same factors.
Factors influencing the FTSE 100 outside the UK are based on the point that companies constituting the index get more than a halfof the revenue outside the UK. Due to this reason, many of these companies report in U.S. dollars, not in the UK currency.
How to Make a Profit on the FTSE 100
To make a profit on the FTSE 100, you do not need to analyze each company in the index. Moreover, nobody does it except for the FTSE Group.
You need to follow the UK economy, the rate of the British pound (GBP), political situation in the country that can influence the economy.
News reports like tax increase, export decrease, imbalance between supply and demand make worse business climate, thus it is a negative factor.
You need to pay attention to the UK indicators like production volumes, production, export and import indices, that is, all values relating to business in the economic calendar.
You can browse the official website of the index where you find the latest news and analytic data:
Besides, you need to have in mind important economic events in the Europe Union as some economic measures can make an impact on the UK economy being a member of the EU.
Presently, the FTSE 100 is among the top liquid indices, that’s why to do its analysis is quite easy due to a great number of news reports and analytical data released.
Where to Make a Profit on the FTSE 100
To make a profit on the FTSE 100, I advise you to trade with AnyOption broker. All you need to earn is to figure out whether the price will rise or fall during the chosen period, and correspondingly, buy CALL and PUT options on the FTSE 100.
I browsed this broker’s page , selected the FTSE 100 as an underlying security, set the time of expiration to 2:00 p.m. It was 1:26 p.m. at that moment meaning that the option was valid during just 34 minutes, and I had to forecast the price for this period.
After analysis, I drew a conclusion that the price would go up. I typed the amount of investment and saw the return I would get in case of a profitable trade, that is, 80%. And finally, I clicked on CALL (UP).
The point is that if the price decreases even by just 0.001 during these 34 minutes, I get a return.
34 minutes flew by fast, the price was up 580 points, and I got a 80% or $96 net return:
Make a profit trading binary options on the FTSE 100! Don’t miss a chance of making money!