Trading global index markets like the FTSE 100 index (or UK 100 index) can open up trading opportunities that do not exist within the local Australian marketplace.
One of the major benefits of trading the FTSE 100 index is that, instead of analysing a whole range of individual stocks, traders can focus on one trading instrument – the FTSE 100 index CFD. By trading this one market, you gain access to the price movements of the top 100 British stocks without having to analyse all 100 shares individually.
What is the FTSE 100 Index?
The FTSE 100 index or the ‘Footsie‘ as its more commonly known, is a weighted-index that is made up of the top 100 British companies (by full market value) on the London Stock Exchange (LSE). Each of the 100 stocks that make up the FTSE 100 index have a specific weighting – this means that the larger the company, the greater overall bearing it will have on the FTSE 100 index. For example, a heavyweight like HSBC Holdings (market cap. of around GBP 144 billion) accounts for a larger proportion of the index than a smaller company, such as easyJet (market cap. of c., GBP 6 billion). HSBC have around an 8% weighting within the index and easyJet would have less than 0.5%.
You will probably be familiar with many of the companies included in the FTSE 100 index, such as; HSBC Holdings, Vodafone Group, BP, Barclays and Rio Tinto.
Why Trade the FTSE 100 (UK 100) Index CFD?
Plenty of investors make the move from dealing in stocks-only to also trading index CFDs and the main reason for this (apart from hedging purposes) is it’s far easier to focus on a couple of indices rather than having to scan & analyse hundreds of individual stocks on a daily basis.
The FTSE 100 or UK 100 index as its known on our trading platform, is the weighted-average of the top 100 stocks in the UK. So if you have a decent handle of the largest 10-20 stocks that make up the FTSE 100, then the transition from trading individual stocks to trading the FTSE 100 index is reasonably seamless.
Other benefits of trading the FTSE 100 & other index CFDs include;
- Trading Indices, like the Aussie 200, Wall St 30 or German 30, gives you access to the overall market of a region without having to spend time & effort analysing hundreds of individual equities
- By trading Indices, you can take advantage of both the rise and fall of the world’s largest indices
- Hedging: hedge your individual stock portfolio by trading indices – thus lessening your exposure to market volatility
- Leverage: trading index CFDs is a leveraged trading product
- Range of markets: trade indices and other financial instruments from all around the globe – all from one trading platform
Trading the FTSE 100 Index is Perfect for Australian Traders
The FTSE 100 index is usually at its most active between 5pm – 7pm AEST (depending on daylight savings) as that’s when the index opens in the UK. This makes it perfect for Australian traders – no need to stay up late or wake up in the early hours to place a trade/ monitor a position (unlike some of the U.S. markets)!
Australian traders can finish their 9-5pm day job, complete their analysis and then be ready for the FTSE 100 index to open for the day. Like most indices, the best time to trade is typically within the first hour after the open. Many of our day-trading clients love to trade the FTSE 100 index for this very reason – and what’s why it’s one of our most popular markets.
UK 100 Index CFD Specifications at TD365
- Trading hours: opens Sunday 23.00 to Friday 21.00. Closed period during the week 21.15 – 21.30 & 22.00 – 23.00 (London time)
- Fixed spread during hours: 1 point
- Out-of-hours spread: 2pts from 16.30 to 21.00, 5pts from 21.00 to 07.00
- Expiry date: None
- Contract months: Rolling
- Margin required: 0.75% (Leverage of 133:1)
- Guaranteed Stop-Losses: Yes
How To Trade the UK100 Index with TD365
You can trade the underlying FTSE 100 index via the UK 100 index market on our CFD trading platform. This instrument can be found on our ‘Popular Markets‘ page or by going to Market Explorer > Indices > European. Because of our low, in-hours fixed spread of 1 point, margin requirement of just 0.75% and no commission, the UK 100 index is one of our most popular-traded markets.
Why Trade with us?
- We are ASIC-Regulated: TradeDirect365 is a trading name of Finsa Pty Limited (ACN 158 065 635 and AFSL No. 422661).
- Low Cost Trading: we are one of Australia’s lowest cost CFD providers
- Tight, Fixed spreads: trade the UK 100 index with a fixed spread of 1pt (in-hours), the Aussie 200 index with a fixed spread of 0.9pts, plus many more
- No Commissions: we do not charge commission on UK 100 index trades
- Simple & Efficient Trading Platform: our trading platform is efficient and user-friendly. Find out more about our trading platforms here.
- Go Long and/or Short: trade your view by buying or selling the UK 100
History of the FTSE 100 Index
The FTSE 100 was launched in January 1984 with an initial weighting (base level) of 1,000 points. Since then, it has become a household name and a reliable indicator of economic health both in the UK and around the world.
Despite several up’s and down’s in its first 10-15 years (Black Monday in 1987, the looming recession of 1991, Black Wednesday in 1992, the Asian Financial Crisis in 1997), the FTSE 100 hit record levels during the dot.com peak of 1999-2000, reaching 7,103.98 in early 2000. But it wasn’t to last – with the dot.com bust, 9/11 terrorist attacks and then the global financial crisis of 2007/08, the FTSE 100 dropped to levels below 3,500 points.
Fast forward to 2017/2018 and the FTSE 100 continually breaks its record intra-day high, which now stands at 7,792.56 points, recorded in mid-Jan 2018.