HomeMoneyManaging your Money

Why do you need to know about the top FTSE 100 companies on the London Stock Exchange if you are interested in trading today?

Why do you need to know about the top FTSE 100 companies on the London Stock Exchange if you are interested in trading today?

The London Stock Exchange has been a trading pool where investors and traders could sell and buy shares since the 17 century

Today, the Financial Times Stock Exchange, informally called the “footse” is the key stock index representing about 80% of indices by market capitalization in the London Stock exchange. For those interested in trading, this represents a joint wager between the London Stock Exchange and the Financial Times. Promoting the FTSE 100 as the leading Market Index used to measure the performances of day-to-day share prices of the best 100 companies in the UK, recorded at the London Stock Exchange.  Let’s check why you should know about the top FTSE 100 companies on the London Stock Exchange when you consider trading today.

FTSE 100 is a wide constituency

Whats the FTSE 100?” should not be a hard knock trade question for the old hand trader. But for the beginner, this is an extensive stock index encompassing the top 100 companies publicly open for traders to buy and sell their shares in the London Stock Exchange. By Market Capitalization, the combined value of the whole LSE companies making up the FTSE 100 weighs 80% of the LSE’s market top. These components forming the FTSE 100 have high value above all companies that’s why they are treated as the blue chip firms in the UK. Thus, people who are interested in trading today need to know about these FTSE 100 companies since they are the indices of a healthy economy.

This means that when the index price goes up, the share prices of the constituents’ shoots up as well. Moreover, a dipping FTSE indicates that the 100 companies are facing a period of reduction. It is important for investors and traders to know about the FTSE 100 because it is a combination of two companies who established the indexes: the Financial Times and London Stock Exchange. Today the FTSE 100 is under the complete control of the LSE.

 The FTSE 100 is multinational

Today, the constituents of the FTSE are divided into two: domestic and international, which entails multinational firms. The trader needs to know about the FTSE 100 since it has all the top companies around the world listed on the London Stock Exchange. All the companies listed on the LSE must have their shares lead by pounds and have to encounter the indexes’ least requirements of liquidity and float.

Traders should understand that the constituents of the FTSE 100 on the LSE are reviewed quarterly by March, June, September, and December. A company that no longer appears from the FTSE 100 it has lost its value on the LSE market cap. The changes on the FTSE 100 constituency impact the traders’ exposure on the variety of the economic sector.

FTSE minimize the risks of trading

Whether you are starting out or a pro, trading involves risks and this you can’t just avoid. All you need to master is the art of minimizing those risks that involve intricate trading. This means coming up with an ideal strategy to maneuver the stock market at the London Stock Exchange.  Knowing about the FTSE 100 is a great market move to begin with for those interested in trading today.

Moreover, the FTSE 100 is a guaranteed secure index when you compare it to the rest.  This is because a trader cannot bet only on one constituent like you do when you are trading a single stock. For the starting, FTSE 100 will expand your exposure to a large pool of stocks in different industries. These stocks give you the opportunity to choose from alternative stocks out of the index if certain companies do not perform as prospected on the London Stock Exchange.  Plus, there is less downside, like low trading costs, when trading a popular index than an individual stock on the London Stock Exchange. 

The FTSE 100 has a strong appeal for traders.

The FTSE comprises the top 100 companies in different nations of the world regulated in the UK and World Bank. Till today, the FTE 100 is the leading stock indices and is yielding impressive trading opportunities on the London Stock Exchange. The Trade Nations always purports that traders should do their own interests. However, if you are keen to trade on the London Stock Exchange market, you need to know about the FTSE since they are the leading stock index at the market cap. Moreover, the FTSE 100 will grant you the choice to use a leveraged product in which you can trade on a small percentage of the actual stock price. In a word, the spread difference between your buying price and selling price becomes your trading cost. So when the spread becomes narrow at the FTSE 100, that’s when it becomes cheaper for you to join the London Stock Exchange.

 Knowing about the top FTSE 100 companies on the London Stock Exchange is a great market move if you are interested in trading today. The FTSE 100 comprises a wide constituency of companies publicly open for traders to buy and sell shares. FTSE consists of multinational firms and the pound must dominate all the FTSE 100 companies listed on the LSE and have to encounter the indexes’ least requirements of liquidity and float. Hence, when trading on the constituencies of the FTSE 100, traders have the chance to use a leveraged product to trade on a small percentage of the full price.

Keep up with the top stories from Reader’s Digest by subscribing to our weekly newsletter.

 

Loading up next...