FTSE 100 Trading: How to Invest in the FTSE | LiteFinance

The article represents a comprehensive analysis of the UK’s leading index and one of the most influential in Europe, the FTSE 100.

In the theoretical part, the FTSE 100’s composition, the index’s advantages and disadvantages, and ways of trading and investing were considered. In the practical part, several general trading strategies were analyzed, which use the peculiarities of the price movement of the instruments included in the index. After learning the basics of these strategies, you can develop your own approach based on your personality and risk appetite.

The article covers the following subjects:

What is the FTSE 100 Index?

FTSE 100 (Financial Times Stock Exchange) is an index of the London Stock Exchange. It includes 100 companies with the highest market capitalization. The FTSE Group, jointly owned by the London Stock Exchange and the Financial Times agency, gave the name to the index.

Non-FTSE 100 shares account for only 20% of the LSE total capitalization. The FTSE 100 may not be as strong an indicator of the domestic economy as it appears since several companies in the FTSE 100 are involved in international activities.

The FTSE 100 is calculated using the following formula: index price = Σ (stock price × the number of company stocks) × Free-float share/index divisor, where Free-float share is the percentage of stocks in free float. The divisor is used in the FTSE calculation to account for changes in the total FTSE 100 capitalization.

The FTSE 100 index is reviewed quarterly. Changes occur due to the replacement of companies with stronger ones in terms of capitalization, liquidity and profitability. Companies are analyzed based on the formula: total value of the company = price of 1 stock of the company × number of issued stocks.

About the FTSE index

FTSE 100 ticker	#FTSE
FTSE 100 futures ticker	Z
Current price	1Z = 7 587.6 USD
Based on	stock prices of the largest market capitalization companies listed on the London Stock Exchange (LSE)
Main trading platforms	Derivatives are traded on the LSE, ICE, and CME Globex exchanges
Leverage	1:100
Margin percentage	1%
Maximum trade volume	100 lots (100 CFDs, each equivalent to the current index price)
1 lot size	Equal the market price of the FTSE 100 index

Why Should You Trade or Invest in the FTSE 100?

The FTSE 100 stock index is diversified across sectors of the economy and mainly consists of companies in the manufacturing sector:

• 30% – consumer goods and services;

• 20% – engineering industry;

• 10% – mining;

• 6% – telecommunications;

• 4% – oil and gas.

30% of companies included in the index are from non-manufacturing industries, 25% are from the financial sector, and 5% are from the healthcare sector.

The focus on the real sector makes the FTSE 100 index more resilient to global financial shocks since industrial products serve as essential necessities. Sectoral diversification helps investors as FTSE 100 investing is equivalent to distributing capital among several companies from different sectors of the economy.

Investing and trading the FTSE 100 has no equity risks:

• the price of the index cannot fall to zero, as it is regularly rebalanced (stocks of companies with weak performance are replaced by new stronger ones)

• the probability of price gaps is significantly lower because the index is a composite instrument where stock prices balance each other.

In terms of trading and short-term investing, the FTSE 100 has the typical benefits of an index instrument, namely, its intraday price movements have a direction and a step-up shape‎:

The general scheme of price movement: flat → impulse → new flat. When the FTSE 100 price declines, each new flat is lower than the previous one, and vice versa when it rises. It is recommended to monitor the chart in real time.

A more complex case is the FTSE 100 price chart on the M15 timeframe:

Flats can narrow and expand, and a stable trend is not established immediately.

How to Make Money with the Index?

The ways of earning trading FTSE 100 are divided into short-term, medium-term, and long-term. Scalping and day trading are short-term. Swing trading (transactions with the carrying over of an open position to the next day) is medium-term, while position trading and long-term investing are long-term.

It is not possible to buy or sell the index directly, so derivatives are used for trading. Instruments suitable for short-term earnings are below:

• CFD on FTSE 100;

• CFD on stocks of companies included in the index;

• FTSE 100 futures;

• futures on stocks of companies included in the index;

• FTSE 100 options;

• options on stocks of companies included in the index;

• stocks of companies included in the index.

CFDs have good volatility and liquidity. Futures and stocks of companies have problems with liquidity. In addition, traders need to carefully study the spreads. Complex instruments with low liquidity are unsuitable for short-term earnings, as a wide spread will negatively affect the profitability of a trading strategy.

The following investment instruments are suitable for medium and long-term investments (in addition to those listed):

Medium-term instruments are better suited for large capitals. It is impossible to buy 10,000 stocks if the offer at the current price is only 1,000. Investors will have to buy the remaining 9,000 at higher prices or use unusual positioning strategies. In the case of ETFs and mutual funds, this problem is decided by managers.

Key FTSE 100 Trading Strategies

Let’s take a look at the FTSE 100 trading strategies based on the step-up price movement.

The first strategy builds on the continuation of the price movement after exiting the flat. As a rule, the length of the price impulse is several times greater than its width. The percentage of profitable trades will be about 30%, and the profit-risk ratio will be 3:1.

The countertrend‎ strategy is based on the return to the side of the flat after the weakening of the impulse. In this case, the percentage of profitable trades will be about 50%, and the profit-risk ratio will be about 1:1.

Trend strategy‎‎

Using a trend strategy, traders can determine the current state of the financial market (trend or flat) using the Pulse Flat indicator. When green dots follow each other without gaps, they indicate a flat state. There must be at least two of them.

Find the beginning and end of the flat in the price chart. The beginning is the price candle or bar, under which the first green dot has formed. The end is the candle, under which the last point of the series was formed. Let’s look at two examples:

Next, find the top and bottom of the flat. To do this, look for the maximum and minimum price values within the selected borders.

There are two flats, a larger one and a smaller one.

How to trade the FTSE 100 according to the trend strategy

FTSE trading signals to buy appear when the upper border of the flat is broken out. Stop loss is set below the lower border of the flat, considering the current spread.

Sales are entered when the lower border of the flat is broken out. Stop loss is set above the upper border, considering the current spread.

Exiting a trade with a profit is possible in several ways:

In the picture, a buy entry was made after the breakout of the first flat. Then the price formed the second flat and exited it in the same direction. Then a stop loss was moved under it. Afterward, the price formed another small flat, the impulse from which was also upward. After this impulse, the stop loss can be moved under the third flat.

The impulse from the new flat in the opposite direction indicates the end of the trend. Therefore, the trade must be closed by the market.

Countertrend strategy‎

This strategy is more complex, as it contains more variables and is based on a rapid change in market sentiment. Necessary conditions for using this strategy (on the example of the Pulse Flat indicator):

• the end of the flat according to the indicator;

• the indicator line on the candle that exited the flat is longer than the previous one;

• the longest line should be formed at the peak of the price movement. At the minimum for a downtrend, at the maximum for an uptrend.

The number 1 indicates the end of the flat according to the indicator (the green dot was not formed). Then the second condition is fulfilled. Namely, on the price candle, which broke out the lower border of the flat, the indicator formed a red line longer than on the previous one. Finally, the price candle, below which the price did not fall, formed the longest red line, which means that the third condition is also met. Therefore, this candle formed a price low.‎

When the initial conditions are met, the entry is made when the next line of the indicator is shorter than the previous one. This indicates the fading of the impulse. A candle on which a smaller line is formed is called a signal candle.

Open a trade after the candle closes, when the indicator’s lower line is fully formed. For confirmation use the engulfing‎ candlestick:

• to enter purchases, the closing value of the signal candle must be higher than the opening price of the previous one;

• to enter sales, the closing value of the signal candle must be lower than the opening price of the previous one.

The minimum price after exiting the flat is formed on the candle, corresponding to the indicator’s longest line. The indicator readings are marked with a blue square (the next line is shorter than the previous one). So, you can open a countertrend purchase on the next candle, marked with an arrow.

Let’s look at an example when the initial conditions are not met.

A candle that has broken out the flat border upside is marked with a vertical red line. The indicator’s blue line is longer than the previous line’s. But the longest blue line formed on the next candle, which is not at the peak of the movement. The candle and indicator readings are marked with arrows. Thus, there are no entry conditions here.

Ways to Trade the FTSE 100

Let’s take a closer look at FTSE 100 index derivatives:

FTSE Cash CFDs

CFD is the most convenient instrument for FTSE 100 trading. It is available in most countries, provides a leverage function and can be traded almost around the clock.

To start trading CFDs, the first step is to find a broker with a good business reputation. Study its experience in financial markets and the quality of technical support. The earlier the broker enters the market, the more attention its employees pay to customer support and the more reliable it is.

The minimum deposit amount for FTSE 100 CFDs is one contract. With leverage of 1:500, about $8 is reserved in the trading account. This is the margin requirement to maintain an open position. It is advisable not to allow the account balance to drop below this level.

FTSE Index, D1 timeframe:

Given the instrument’s volatility, the recommended deposit for convenient trading with a minimum volume is from $50 to $200, depending on the type of trade. Scalping requires less volume, while swing trading requires more because of the difference in the value of stop losses.

The FTSE 100 CFDs trading session lasts from 00:00 to 22:55. There is no weekend trading.

You can open both long and short trades on index CFDs. To increase the profit potential, it is better to trade intraday during the London session, from 11:00 to 19:00 (GMT +3), when volatility and liquidity are at their maximum. It is not recommended to trade on timeframes below M15. This will reduce the spread’s negative impact on the trade’s result.

 

FTSE Futures

FTSE 100 futures are exchange-traded instruments. You can only trade them during business hours of the exchange they are listed on:

• ICE exchange (Z ticker). Working hours are from 16:00 to 23:00 (GMT+3) on weekdays;

• LSE exchange (UKX ticker). Working hours are from 11:00 to 19:30 (GMT+3) on weekdays;

• CME Globex exchange (American) (FT ticker). Working hours are from 18:00 to 02:00 (GMT+3) on weekdays.

The contract size across all exchanges is £10 x the current FTSE 100 price. The minimum step is 0.5 ticks (£5).

For example, the current price fluctuation is around £7,300. This means that the size of one contract is approximately £73,000. Since the standard leverage on futures is 1:5, this type of instrument has very high deposit requirements.

For lower deposit requirements, consider E-mini contracts that are traded on the CME (Chicago Mercantile Exchange). The size of the contract will be £730, which is 100 times less. With leverage of 1:5, a deposit of £300 to £500 will be enough for trading.

FTSE 100 Index on ICE exchange:

FTSE 100 Index on LSE exchange:

FTSE 100 Index on CME exchange:

Index futures are suitable for short-term trading or scalping. The spreads are tighter than CFDs, and 24/7 trading is unnecessary as short-term trades last from a few seconds to a few hours at the most.

In short-term trading, it is better to enter trades during the London session, from 11:00 to 19:00 (GMT+3). During this period, FTSE 100 stocks are most actively traded.

FTSE Options

Index options give the right to enter trades with the underlying asset after a time and at a price specified in advance in the agreement. The underlying asset of an FTSE 100 option is a futures contract on the FTSE 100 index.

The global stock index option buyer can exercise the right to buy the futures if the forecast is confirmed or refuse to exercise it if not. In case of refusal, the buyer will incur losses in the amount of the premium paid to the seller of the option.

A put option on the FTSE 100 gives the right to sell futures on the FTSE 100, while a call option gives the right to buy this asset. Options can be traded around the clock, both short-term and long-term. Also, the option traders can choose the amount of funds to be used in the trade. Potential loss and possible profit are known in advance. In addition, the transaction can also be canceled.

The more volatile the instrument, the higher the profit probability. The option price depends on the current FTSE 100 price. The index has above-average volatility and a low price compared to other indices. Therefore, it is particularly suitable for options trading.

FTSE ETFs

An index ETF is an exchange-traded security that gives the right to own part of a stock portfolio. In the case of the FTSE 100, ETF issuing companies build a portfolio according to the composition of this index. Thus, the ETF’s price action is similar to that of the FTSE 100. ETF purchases allow investors not to buy all the stocks included in the FTSE 100, having a stake in each of them.

As in the case of other indexes like the S&P 500 or NASDAQ, the same companies, such as Vanguard, Fidelity (HSBC), and Black Rock (iShares), are involved in creating ETFs on the FTSE 100.

1. Vanguard: FTSE 100 UCITS ETF (VUKE)

Results as of October 31, 2022. Benchmark: FTSE 100 index. Monthly percentage returns are shown.

Chart for the 18 months till November 2022:

The cost of 1 ETF ranges around £31, which is significantly cheaper than the futures.

HSBC FTSE 100 UCITS ETF GBP

Chart for a 3-year period:

The cost of the fund is slightly higher, around £105. Compared to the FTSE 100, the fund shows almost identical dynamics during periods of growth and performs slightly worse during periods of drawdowns:

iShares Core FTSE 100 UCITS ETF

Dynamics of profitability by years, in comparison with the benchmark (the FTSE 100 index):

The returns and drawdowns of this ETF are almost identical to the FTSE 100.

The fund’s profitability is marked in blue, and the FTSE 100’s percentage return over five years is marked in brown:

In this case, the growth of the fund’s profitability is less dynamic than in the previous two, and the drawdowns are deeper. However, the yield deviation is minimal compared to the FTSE 100 benchmark. Instead of trading the FTSE 100 ETF, use this instrument for investing.

FTSE 100 annual profit

Let’s look at the annual dynamics of FTSE 100 index quotes:

• the index is analyzed from November of the previous year to November of the next (for example, from November 2021 to November 2022); 

• closing: price value at the end of the period;

• profit: profit of the index for the period. Calculated as the difference in % between the value at the end of the period and at the beginning

• maximum: the maximum value of the index for the period under review;

• minimum: the minimum value of the index for the period under review;

• difference: the difference between the maximum and minimum for the period;

• average: (maximum + minimum) / 2.

Period	Closing	Profit	Maximum	Minimum	Difference	Average
2021 – 2022	$7 175,54	1,64%	$7 687,27	$6 706,85	$980,42	$7 313,92
2020 – 2021	$7 059,45	12,66%	$7 402,68	$5 554,73	$1 847,95	$6 838,20
2019 – 2020	$6 266, 19	-14,71%	$7 689,67	$4 898,79	$2 790,88	$6 318,92
2018 – 2019	$7 346,53	5,25%	$7 727,49	$6 536,53	$1 190,96	$7 217,98
2017 – 2018	$6 980,24	-4,73%	$7 903,50	$6 851,59	$1 051,91	$7 420,05
2016 – 2017	$7 326,67	8,00%	$7 598,99	$6 676,56	$922,43	$7 280,30
2015 – 2016	$6 783,79	6,73%	$7 129,83	$5 499,51	$1 630,32	$6 467,27
2014 – 2015	$6 356,09	-5,45%	$7 122,74	$5 768,22	$1 354,52	$6 611,30
2013 – 2014	$6 722,62	1,08%	$6 904,86	$6 072,68	$832,18	$6 702,18
2012 – 2013	$6 650,57		$6 875,62	$5 605,59	$1 270,03	$6 378,53

Table 1. FTSE 100 performance for the period 2012-2022

If investors had invested at the beginning of the period and withdrawn them at the end, the total return on their investments would be 10.47%. On the other hand, during each period, the profit potential ranged from $832.18 to $2,790.88 (Difference column). The table shows the potential profit that investors will receive when buying at the low and selling at the high for each period.

Period	Maximum	Minimum	Difference	Profit potential
2021 – 2022	$7 687,27	$6 706,85	$980,42	14,62%
2020 – 2021	$7 402,68	$5 554,73	$1 847,95	33,27%
2019 – 2020	$7 689,67	$4 898,79	$2 790,88	56,97%
2018 – 2019	$7 727,49	$6 536,53	$1 190,96	18,22%
2017 – 2018	$7 903,50	$6 851,59	$1 051,91	15,35%
2016 – 2017	$7 598,99	$6 676,56	$922,43	13,82%
2015 – 2016	$7 129,83	$5 499,51	$1 630,32	29,64%
2014 – 2015	$7 122,74	$5 768,22	$1 354,52	23,48%
2013 – 2014	$6 904,86	$6 072,68	$832,18	13,70%
2012 – 2013	$6 875,62	$5 605,59	$1 270,03	22,66%

Table 2. Maximum FTSE 100 profit potential for a “buy and hold strategy”.

Thus, following the strategy of two transactions at the beginning and end of the period, investors lose tens of percent of the possible profitability.

Let’s further assume that, having studied the price chart and the basics of technical analysis, investors used moving averages. The second assumption, supported by historical data, is that indices always grow over a long time period. Therefore, make a buying decision at the first sign of growth after a long period of falling prices. For example, when crossing moving averages.

Since the moving average gives a signal with a delay, let’s assume that the entry point is 30% higher than the minimum value and the exit point, based on the application of the moving average, is 30% lower than the maximum value.

Then the profit for each period will be as follows:

Period	Minimum	Entry point	Maximum	Exit point	Profit
2021 – 2022	$6 706,85	$7 000,98	$7 687,27	$7 393,14	5,60%
2020 – 2021	$5 554,73	$6 109,12	$7 402,68	$6 848,30	12,10%
2019 – 2020	$4 898,79	$5 736,05	$7 689,67	$6 852,41	19,46%
2018 – 2019	$6 536,53	$6 893,82	$7 727,49	$7 370,20	6,91%
2017 – 2018	$6 851,59	$7 167,16	$7 903,50	$7 587,93	5,87%
2016 – 2017	$6 676,56	$6 953,29	$7 598,99	$7 322,26	5,31%
2015 – 2016	$5 499,51	$5 988,61	$7 129,83	$6 640,73	10,89%
2014 – 2015	$5 768,22	$6 174,58	$7 122,74	$6 716,38	8,77%
2013 – 2014	$6 072,68	$6 322,33	$6 904,86	$6 655,21	5,27%
2012 – 2013	$5 605,59	$5 986,60	$6 875,62	$6 494,61	8,49%

Table 3. Approximate profit potential when opening trades according to technical analysis.

Is it really that simple? Of course not. Technical analysis sometimes gives signals before the global price reversal, which reduces the profitability indicated in the table. However, unlike standard investment objects, indices are more prone to growth since weak securities included in them are replaced by stronger ones.

Therefore, the calculation is approximate. But it shows how profits increase when investors start using chart analysis compared to the strategy of buying at the beginning of the period and selling at the end.

Ways to Invest in the FTSE 100

Investors have more investment options than traders. In addition to CFDs, futures and, options, investors can use mutual funds and build their own stock portfolio from the FTSE 100 index.

To invest in the FTSE 100 through the purchase of stocks of index companies, you need a large capital. The share price of one company, for example, HSBC Holdings PLC (HSBA), is about £490.

Also, in this case, investors will have to carry out independent rebalancing. That is, selling stocks of companies removed from the index and adding new ones. Another drawback is that the list of companies that meet the requirements for inclusion in the FTSE 100 is limited. Although stocks of companies listed on other exchanges are less liquid, those listed in other currencies could improve the profitability and degree of portfolio diversification. On the other hand, many companies pay dividends to their stockholders.

ETFs are an alternative to buying all the stocks in the index yourself. For example, the FTSE 100 UCITS ETF (VUKE) price in November 2022 was £32. When buying an ETF, investors receive the same portfolio of 100 stocks of the FTSE 100 companies, investing hundreds of times less than when buying on their own.

Advantages of ETFs:

• the opportunity to invest in all shares of the index with a smaller percentage of capital;

• identical (with a small margin of error) FTSE 100 yield and drawdown charts;

• the portfolio is rebalanced by the ETF issuer, not the investor;

• receiving dividends, as from the ownership of stocks.

FTSE 100 ETF ownership cost as a percentage of investment value:

1. Vanguard: FTSE 100 UCITS ETF — 0,09%;

2. HSBC FTSE 100 UCITS ETF — 0,07%;

3. iShares Core FTSE 100 UCITS ETF — 0,07%.

Mutual funds are another option to invest in the FTSE 100. They are similar to ETFs. Investors also buy part of the portfolio in the form of a security (stock). The main difference is that each mutual fund has a manager who forms the number of stocks in the portfolio at his/her own discretion. As a result, the mutual fund’s profitability may differ significantly from the FTSE 100. Moreover, the commission to the manager will be added to the costs.

What Drives the FTSE 100 price?

The FTSE 100 quotes are mainly influenced by the financial performance of the companies included in it. Profit growth, acquisitions of other companies, and the appointment of a strong team of top managers positively affect the stocks of blue chips included in the index. On the contrary, losses, logistics problems, and termination of work with major partners negatively affect the FTSE 100.

Economic events in the sector in which the company operates also contribute to changes in stock prices. For example, restrictions on the transportation of goods during the pandemic led to a decrease in turnover in the construction and industrial sectors. As a result, stock prices of construction and industrial companies have declined, causing the FTSE 100 to drop in 2020.

Since the companies from the FTSE 100 are registered in the UK, they are affected by the economic situation in the country (inflation, unemployment, consumer price index, and interest rate changes).

Several FTSE 100 companies operate outside the UK. Their stocks are affected by events taking place in other countries. For example, companies involved in the mining industry are affected by the economic situation in the countries where the deposits are located. The more a company is involved in international activities, the more it will be influenced by the situation in the global economy (political and economic relations between countries, Fed decisions, national projects).

The larger the company’s capitalization, the stronger the impact of its stock price on the index. Therefore, the FTSE 100 uptrend can start after just one positive press release by a giant company like BP or Royal Dutch Shell.

How does the FTSE 100 reflect the economic situation?  

The market capitalization of companies on the FTSE 100 is about 79% of the total capitalization of stocks traded in the London Stock Exchange. Despite this, it is not the best indicator of the state of the UK economy, as more than half of the companies do business abroad. As a result, the index is highly dependent on the GBP exchange rate against the currencies of the countries in which they operate.

Nevertheless, the FTSE 100 dynamics are sensitive to changes in such UK indicators as:

• Central Bank interest rates;

• inflation;

• production and export volumes;

• changes in tax legislation.

In the case of negative news related to these indicators, the index rate decreases and rises in the case of positive news.

Pros and cons of FTSE trading  

The FTSE is well-balanced across economic sectors, and most of its constituent companies are involved in manufacturing, which makes the index stable. Sector diversification protects against collapses, while the manufacturing base helps to recover from global shocks.

The FTSE, like any index instrument, is diversified by the number and quality of its constituent companies. It includes only blue chips, which means that the deterioration in the profitability of even a few companies will be balanced by the results of other participants. Since the FTSE 100 is one of the most popular indices, its derivative products are highly liquid.

Thus, the FTSE 100 pros are:

• diversification by sector;

• most of companies are involved in the real sector of the economy;

• recovery after drawdowns;

• analysis of quantitative indicators (for example, profits and losses of the company before investing in its stocks) is optional;

• low probability of gaps during CFD trading;

• high liquidity (CFDs, ETFs);

• volatility is above average compared to other European indices (the average daily rate is 403 price points against 275 for the Euro Stoxx 50 index).

FTSE 100 cons are related to its member companies, the current economic situation, and access to trading related instruments:

• the index is in a long-term flat;

• transactions with stocks included in the index require access to the London Stock Exchange;

• low percentage of stocks of fast-growing IT companies;

• complex fundamental analysis, as some companies are engaged in international activities;

• recovery after a drawdown can be long (up to several years).

List of the FTSE 100 Companies

To be included in the index, stocks of companies must meet the following requirements:

• they must be traded on the London Stock Exchange;

• be highly liquid;

• there must be more than 25% of the stocks in free float for UK companies and more than 50% for companies registered outside the UK;

• their value must be expressed in euros or GBP.

Name	Industry	Capitalization (bln £)
Royal Dutch Shell	Oil and gas industry	160.12
Unilever	Consumer goods	90.42
HSBC	Banking	88.11
British American Tobacco	Tobacco industry	71.4
GlaxoSmithKline	Pharmaceutical industry	67.38
SABMiller	Brewing	67.32
BP	Oil and gas industry	63.13
Vodafone Group	Telecommunications	56.55
AstraZeneca	Pharmaceutical industry	51.23
Reckitt Benckiser	Consumer goods	46.32
Diageo	Alcoholic beverage manufacturing	46.01
BT Group	Telecommunications	45.61
Lloyds Banking Group	Banking	44.11
BHP Billiton	Mining industry	41.88
National Grid	Energy	36.14
Imperial Brands	Tobacco industry	35.78
Rio Tinto Group	Mining industry	34.84
Prudential plc	Financial services	31.63
Royal Bank of Scotland Group	Banking	28.6
Barclays	Banking	27.18

Table 4. The top 20 FTSE 100 companies by capitalization.

A new list of 111 companies with the highest capitalization is compiled during the quarterly rebalancing. Companies that were in the FTSE 100, but not included in the new list, are automatically excluded from the index. Companies from 1st to 90th place in the new list are automatically included in the FTSE 100. Once a year, companies are checked for compliance with the required level of liquidity.

FTSE Trading Hours

The FTSE 100 index is traded during London Stock Exchange business hours from 11:00 to 19:30 (GMT +3). Derivatives, in addition to the London Stock Exchange, are also traded:

• on the Intercontinental Exchange (ICE). FTSE 100 is traded from 16:00 to 23:00 (GMT +3);

• on the Global Trading Platform of the Chicago Mercantile Exchange (CME Globex). FTSE 100 is traded from 18:00 to 02:00 (GMT +3).

Conclusion

Novice investors are not recommended to consider investing in the FTSE 100, as there are more stable, liquid, and profitable alternatives among the indices, such as NASDAQ and S&P 500. Also, based on technical analysis, the UK index is near the upper flat border on higher timeframes. This increases the possibility of its downward movement and creates unfavorable conditions for using the “buy and hold” strategy. In case of moving to the lower flat border, investors will have to wait out the drawdown.

Buying an ETF is the best way to invest in the FTSE 100. For a minimal fee, investors get rights comparable to holding a portfolio without paying the full cost of the stocks.

However, the FTSE 100 is more interesting as a trading object. It has sufficient intraday volatility and understandable price dynamics. The index is well suited for both breakout and countertrend trading styles.

Price chart of FTSE in real time mode