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FTSE 100: Trading the Footsie

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The index started in 1984; a combination of the Financial Times and the London Stock Exchange, leading to the acronym that it is known for, FTSE. Its creation has enabled tradesmen of all calibers to gain access to the European market, as well as in achieving financial gain through the execution of skillful strategies in buying and selling. Representing 85.2% of the UK’s market, with more than 400 international companies listed on the London Stock Exchange, it mirrors the health of the UK economy serving as a gauge of its overall performance.

 
The FTSE is a capitalization-weighted index of publicly-traded shares, an estimation based on a company’s outstanding shares (owned by the shareholders) multiplied by the current value of the share market price. Managed by the FTSE Group, stringent measures are upheld to keep the list of companies updated, with real-time calculations performed and published every 15 seconds.

A gauge of business prosperity

The requirements that need to be fulfilled by companies to be considered are: having assigned a Sterling or Euro denomination, liquidity screening, held & shared bonds, and nationality. Furthermore, companies are weighted with respect given to a company’s daily stock performance, having been included on the list of the London Stock Exchange, including a quarterly performance report submitted to the FTSE Group.

The committee that maintains the list of companies is composed of finance industry professionals who have achieved more than their personal capacity to push forward the development.  Its members are from a mix of asset owners and managers, brokers, consultants, and corporate advisers.

FTSC100_optionfair
Occupying approximately 7.8% of the world’s equity market capitalization, it is similar to Standard & Poor’s in the United States. For those who did not make it to the capital positions of the top 100 companies, companies may be classified in the FTSE 250 (the next 250 largest companies not including the FTSE 100) or the FTSE 500 (the next 50 largest companies not including the FTSE 100 or FTSE 250).

The following are several factors that affect the behavior of the FTSE 100 Index:

News releases

Company news exerts a huge impact on the value of a company, such as the manufacturing data and announcements of products and services scheduled to be launched. The same is true with international and local discussions on interest rate decisions, GDP report, inflation data and housing data.

Political climate

There is a connection in political activities of the EU markets and the performance of the FTSE 100. Although the UK opted out and has chosen not to be a part of the EU, the EU is its largest economic partner. Widespread societal unrest in one of the countries in the Eurozone directly affects the FTSE 100.

UK earning season

A positive finish in the earnings reports of UK companies translate to an increase in the estimated worth of the FTSE. Public confidence in buying and selling soars to new heights as well. The same is true when a dismal company performance is seen in earnings reports.

How to invest the FTSE 100 in binary options

Before you get involve with the FTSE 100, consider the inflation and GDP data of the UK market. Check the trading hours as it is different for the different Eurozone markets. Set your expiries in a way that you can assess the effect of any news releases from the UK and work them to your advantage.

Increasing your profits with binaries

It is considered that this exhibits a lower volatility than that of its Japanese and American counterparts. Enjoy predictable results when you make use of conventional methods of technical analysis of data, such as: concluding trends in chart patterns and candlestick references. It is important to be cautious and not to crack under pressure, lest you risk making the wrong decision in predicting the increase or decrease in the value of this index.

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