What is an index fund?
A stock index is a benchmark, which measures the performance of several stocks. For example, the well-known S&P 500 includes the 500 largest companies listed on stock exchanges in the United States.
How do I invest in index funds?
Select the index fund or funds you want to trade. If you are a newbie, it’s better to choose well-known and broad market indices at first. Take into consideration an index sector (for example, Nasdaq 100 is a technological index) and its geography (Nikkei 225 - the leading index of Japanese stocks).
Are index funds safer than individual stocks?
A stock index is an already well-diversified portfolio. Diversification is one of the main pillars of trading stocks. It simply means having a range of various assets to minimize the risks of unexpected price movements of one asset. Therefore, indices are more sustained to unexpected market shocks than individual stocks and thus considered as low-risk investments.
How to start trading?
If you are 18+ years old, you can join FBS and begin your FX journey. To trade, you need a brokerage account and sufficient knowledge on how assets behave in the financial markets. Start with studying the basics with our free educational materials and creating an FBS account. You may want to test the environment with virtual money with a Demo account. Once you are ready, enter the real market and trade to succeed.
The FTSE100 is an index of the 100 largest companies listed on the London stock exchange market.
Financial Times Stock Exchange index tracks the performance of companies with the largest capitalization listed on the London Stock Exchange market, including Rolls-Royce Holdings, Barclays, Royal Dutch Shell and Carnival.
The FTSE100 index follows up changes in those share prices. The total capitalization of the index basket covers approximately 80% of the capitalization of the entire UK market. It has as much importance in London as the U.S. Dow Jones Industrial Average and S&P 500 have the United States and it is a major indicator of the performance of the broader market.
FTSE100 live chart allows traders and investors to follow the rises and falls of the index.
How is it calculated?
The level of the stock index FTSE 100 is calculated using the total market capitalization of the constituent companies and the index value. Total market capitalization changes with individual share prices of the indexed companies throughout the trading day, so the index value also changes. When the FTSE 100 is quoted up or down, it is measured against the previous day’s market close.
How to trade FTSE100 with FBS?
You can trade contracts for difference (CFDs) on the FTSE100. CFDs reflect the FTSE100 movement. It allows you to trade in both directions. In other words, you can gain as from the price going up as well as from it going down.
You can also use leverage. This means that with only a small amount of money you can control much bigger financial positions. Always remember that leverage gives you an opportunity to multiply your account. On the downside, you may lose a considerable part of it if the market if the market goes against your trades.
What drives the FTSE100 index price?
As most of indices, the FTSE100 is driven by earnings reports, key appointments, and new product launches.
2022-02-17 • Updated