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London Stock Exchange Index: Trading on the FTSE 100

The London Stock Exchange, or LSE, is the principal financial market of the United Kingdom where all the stock market transactions for British companies take place every day.

As with the other national stock markets, the London Stock Exchange has a principal stock market index, the ‘Footsie’ or FTSE. Here you can learn more information on this subject.

 

The FTSE in detail:

The abbreviation FTSE actually stands for ‘Financial Times Stock Exchange’. This major stock market index incorporates 100 British companies quoted on the London Stock Exchange, selected mainly according to their stock market capitalisation.

It should also be noted that the FTSE 100 Index is actually the popular Index of the London Stock Exchange.

To efficiently trade this stock market index using CFDs, it is important to first understand that the FTSE 100 is highly representative of the British economy and this country’s financial and economic health. It should be noted that the companies represented in this index embody roughly 80% of the total stock market capital on the London Stock Exchange.  

However, all the companies quoted do not have the same weight relative to the calculation of this index. Therefore the results of these 5 most important companies should be followed closely; BHP Billiton, Royal Dutch Shell, HSBC, Vodafone and British Petroleum.

 

Historical rates for the London Stock Market Index:

The historical analysis of the FTSE 100 reveals valuable indications relative to the way it reacts to different economic situations and crises

Initially quoted at 1,000 points, it was in 1999 that this index reached its highest historical level of 6,950.60 points. It moved in a saw tooth manner between 2006 and 2007, ending at 6,730.70 points.  

As with the majority of international indices, the Footsie suffered during the subprime crisis and fell to around 5,495 points. 

The economic crisis then dragged this index towards its lowest level of around 3,500 points during the year 2009. It then recovered somewhat by small hops up to the 5,500 point level in 2010 which was followed by a corrective downwards move. 

Since 2010, the FTSE 100 has trended towards a rise. In fact a strong rise was experienced in July 2010 that enabled the 6,000 threshold to be breached, then, in 2011, this index stabilised at around 5,800 points.

Online trading on the London Stock Exchange Index:

As with many of the major stock market indices, you can trade on the FTSE directly online using CFDs. By speculating on these contracts you can make thereby profits on the rise or fall of this asset rate.