FTSE 100 Index Trading

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Today there are hundreds of online trading platforms that facilitate the traders and investors to trade in online businesses like crypto trading, currency trading, stock exchange and many more. These trading platforms allow their users to invest with their own strategies and related business domains. An online trading platform has multi options of online trade. It provides different strategies to their customers for investment. Stock exchange is one of the biggest businesses running on these trading platforms with one of the highest market cap. The Stock Exchange is a body that operates in the stock market, where secure transactions are carried out, through continuous public auction mechanisms, and where stock brokers can also carry out other intermediation activities. Trusted brokers are the secure intermediaries that act as members of a stock exchange and can intermediate shares and any other type of securities. They can also trade off the stock market. In stock exchange, the buyer buys a certain share of stock. All the transactions are performed over the counter.

OTC deals involve a wide range of assets - from commodities to financial instruments such as stocks and derivatives. Unlike traditional exchanges, the OTC market is decentralized and has no physical location, and trading is done through dealer networks. Traders are not necessarily directly involved in the process as they may seek help from intermediaries such as brokers or stock exchange services. The stock exchange has a higher profit margin than other trading strategies. But on the other hand, it has a bigger risk of loss than crypto trading. In the stock exchange, the buyer buys all the stock at once. If prices go high then you get the profit and if prices go low, you lose your asset value. Transaction in the stock exchange is handled by a trusted broker. This broker can be a person or a trading platform itself. The broker gets his commission for executing successful sale or purchase between buyer and seller.

Buy & Sell FTSE 100 Index

FTSE is also known as Financial Times and Stock Exchange which is referred to London Stock Exchange group. FTSE 100 index is most popular index market of FTSE. It was started by base level of 1000 and now it has already crossed 7000 in recent years. Trading FTSE 100 index has become more prominent because it consists of the 100 most highly capitalized companies in UK which are listed on London Stock Exchange. FTSE 100 Index trading provides a piece of collective information and real-time rates about these listed stocks. Index trading is a group of stocks that is weighted according to index rates. When investors buy FTSE 100 index regarding any stock these Indices act according to the valuation of stocks. When the price of a stock increases it will move upwards in the index. It generates a real-time summary in the group of stocks. FTSE Indices help to guess and understand the behavior of price rise and fall. The margins in index trading are much lower which makes it more stable than the stock exchange. Companies in FTSE 100 index trade represent the more than 80% of the market capitalization of the entire London Stock Exchange. Many of the world's biggest brands are included in the FTSE 100, including Coca Cola, Barclays, BHP, Burberry, GlaxoSmithKline, Imperial Brands and Royal Dutch Shell.

In FTSE trading the investors can buy the shares of any stock index. Investors try to generate more potential profit without using much personal capitals. For example, if a trader takes a long position of $ 2,000 on the FTSE 100 and it increases by 10%, using 5x leverage, the same rise becomes a profit of 50%, or $ 1,000. A similar spot trading without leverage would only result in a 10% profit, or $ 200. When the FTSE index increases, it means that the total value of the companies in the index increases. And when the FTSE index decreases, it means that the total value of the companies in the index decrease. Remember that it is not necessary that increment or decrement of indices affect the value of all companies’ indices. The rise and fall of the index is easier to see when viewing a chart of the price fluctuation, which is provided by the trading platform itself or by financial reporting sites. There are a variety of factors that affect the development of the FTSE 100 market. The two main ones are economics and politics. During periods of economic growth, stock markets generally rise. This is because this environment typically translates into increased employment, consumer spending, and corporate profits. If companies start making more profits, investors tend to buy more shares in those companies, which helps drive the overall stock market up.

Therefore, investors pay close attention to economic data such as:

  • Inflation reports
  • Central bank policy on interest rates
  • Retail sales
  • Currency movements and many more.

The FTSE 100 Index offers investors and speculators many ways to invest. The main modes of investing in FTSE include exchange-traded funds and mutual funds. Speculators can change the FTSE 100 by buying or selling various options. Some investors like the index because it tracks a wide range of UK companies, providing significant diversification and a simple way to reflect the fate of large companies listed on the London Stock Exchange.

The FTSE 100 is a stock index rather than a stock of a single company, which means that the growth of the index is driven by around 100 companies. For traders, this means that the risk is mitigated because a company's poor performance will not impact the index too much, and when there is a growth in macroeconomic factors, most of the best companies will benefit together. Never test the depth of river with both the feet. That’s why you should never use 100% leverage and never invest more than what you can afford to lose. A good investor always keep in mind the expected risks and losses in online trading.