Indices

UK100: FTSE 100

A CFD tracking the FTSE 100, the index of the 100 largest companies listed on the London Stock Exchange.

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What happens next

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Market DNA

Below, UK100 is taken apart: its class, its contract, its hours and what is connected to it. Structure, not a signal.

Market DNA

What UK100 is made of.

Its class, its contract, the hours it lives in and the institutions, releases and ideas connected to it.

This is structure. It is not a score and it is not a signal: it tells you what the instrument is, not what it will do.

Asset class: Indices
Contract: Index CFD, quoted in index points
Platform symbol: UK100
Typical sessions: Follows the underlying futures and cash sessions. Activity concentrates around each exchange’s regular hours.See the sessions on the World Market Clock
Central bank: Bank of England
Economic events: Gross Domestic Product

Trading conditions

As published by GIO4X.

Spread from: 1.2 pointsminimum, widens with market conditions
Leverage: 1:100depends on instrument and jurisdiction
Minimum lot: 0.1
Contract: Index CFD, quoted in index points
Platform symbol: UK100

IndicativeSource: GIO4XIndicative trading conditions published by GIO4X. Not a live quote; actual spreads and requirements vary with market conditions and account type.

All trading conditions

Contract size, pip value and margin per lot

Contract size: Not yet published
Pip value per 1.00 lot: Not yet published
Margin per 1.00 lot: Not yet published

The 777 Raptor demo terminal does not list UK100, and GIO4X has not yet published a contract specification for it. No figure is borrowed from a similar instrument. Contract specifications

Third-party chart

UK100 on a daily chart

The chart is supplied by TradingView and stays unloaded until you ask for it. Loading it connects your browser to TradingView’s servers.

Third partyChart by TradingViewThird-party data for FTSE 100, not supplied or verified by GIO4X and not a GIO4X price. Symbol FOREXCOM:UKXGBP, UTC.

Before you trade it

Work the numbers. Know the words.

Tools

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Glossary

Full glossary

Profile

FTSE 100: what the index is.

The facts in brief; the sections that follow give the reasoning. General education about the index itself. It states no price, market value or ranking, makes no forecast and is not advice.

What it contains: The hundred largest companies listed on the London Stock Exchange.
How members are chosen: By rule: rank by market value at a quarterly review, with a margin on either side of the hundredth place so that companies near it do not move in and out each time.
How it is weighted: By the market value of the shares available to the public.
Who maintains it: FTSE Russell, part of the London Stock Exchange Group.
Price or total return: The figure quoted is a price index, in sterling: dividends are left out. For an index whose members pay as much as these, the gap to the total-return version is wide.
Cash index, future and CFD: The cash index is calculated during London trading hours. The future is a quarterly contract on a London derivatives exchange that trades for longer hours. A CFD is a contract with a provider on a price taken from one or the other.

Weighting, with two companies.

Invented companies and invented figures, to show the arithmetic. They are no company’s price and no index’s weights.

Two invented companies and the weight of each in an index, by share price and by market value
Company	Share price	Shares	Market value	Weight by price	Weight by value
Company A	300	10 million	3 billion	three-quarters	one quarter
Company B	100	90 million	9 billion	one quarter	three-quarters

This index: by market value

An index weighted by market value adds the two market values, 12 billion. Company B supplies 9 of the 12, so it is three-quarters of the index, although its share is the cheaper. If B’s shares rise by a tenth and A’s stand still, the index rises by 7.5%; if A’s rise by a tenth and B’s stand still, by 2.5%.

For contrast: by share price

A price-weighted index adds the two share prices, 400, and divides by a fixed number. Company A supplies 300 of the 400, so it is three-quarters of the index, although it is the smaller company. If A’s shares rise by a tenth and B’s stand still, the index rises by 7.5%; if B’s rise by a tenth and A’s stand still, by 2.5%.

The same two companies and the same day’s prices give two different indices. Neither is wrong; they answer different questions. In practice only the shares available to the public are counted in the market value, and a real index has many more members.

A price index follows share prices alone, so it falls when a member’s shares begin trading without their dividend. A total-return index treats each dividend as reinvested, so over time it rises by more than the price index of the same shares. The two are the same companies and the same weights; only the treatment of dividends differs.

In depth

What is particular to FTSE 100.

The FTSE 100 holds the hundred largest companies listed in London, but it is not a measure of the British economy. Most of its members’ revenue is earned abroad, in dollars and other currencies, and its largest sectors are oil, mining, banking, pharmaceuticals and consumer goods. It has little technology and a long record of paying out a large part of its profits as dividends.

General education about the underlying market. It states no current price or rate, makes no forecast and is not advice. What GIO4X offers on this instrument is in the trading conditions on this page, not here.

What moves it

Sterling: Because members earn much of their revenue in foreign currencies, a fall in the pound raises the sterling value of those earnings and has often coincided with a rise in the index; a rise in the pound has often done the reverse. The clearest example followed the referendum of June 2016, when the pound fell sharply and the index recovered within days. The link fails when the pound and shares are both sold on a loss of confidence in British assets.
Oil and metal prices: Large oil producers and mining companies are among the heaviest members. Their profits rise and fall with the prices of crude oil, copper, iron ore and other commodities, so the index can gain on a day when higher commodity prices weigh on other markets.
Interest rates: Banks and insurers form a large part of the index, and their lending margins generally widen when interest rates are higher. Higher rates therefore affect this index differently from one dominated by technology. Decisions of the Bank of England matter most to the banks and to the domestic members.
Global, more than domestic, growth: The more domestic British companies are mostly found in the FTSE 250, the index of the next 250 by size. The FTSE 100 responds more to the outlook for world trade, China’s demand for materials and conditions in the United States than to British economic releases.
Dividends: Many members pay regular and comparatively large dividends. That attracts investors who want income, and it also means the price index understates what a holder of the shares has received over time.

Mechanics

How it is quoted and built.

Weighted by free-float market value: Each member’s weight follows the market value of its shares in public hands. The index is maintained by FTSE Russell, part of the London Stock Exchange Group, under published ground rules, with far less discretion than a committee-selected index.
The ranking rule: Membership is decided by rank in market value. At each review a company outside the index is brought in if it has risen to 90th place or above, and a member is removed if it has fallen to 111th or below. The band between the two prevents companies near the boundary from moving in and out at every review.
A price index quoted in sterling: The headline index excludes dividends and is calculated from prices on the London Stock Exchange in pounds. Several members report their accounts and declare their dividends in dollars, which is one route by which the exchange rate reaches the index.
The closing auction: London’s day ends with an auction, and the official closing level comes from it. A large part of the day’s share volume trades in that auction, particularly on review and expiry days.

Not the same thing

The market itself, and a contract on its price.

The index itself: The index is a calculation published during London trading hours. It cannot be owned; it is the yardstick that products are built to follow.
A fund that tracks it: A tracking fund owns the hundred shares and receives their dividends, which it either pays out or reinvests according to its type. For an index that pays as much in dividends as this one, the difference between the fund’s return and the change in the price index is considerable over time.
A futures contract on it: Quarterly futures on the index trade on a London derivatives exchange and settle in cash. Their price is usually below what financing alone would suggest, because the dividends expected before expiry are subtracted. They trade for longer hours than the shares, so they lead the index at the open.
A CFD on it: A CFD exchanges the change in a provider’s price for the index. The holder owns no shares and receives no dividend: where the product is based on the cash index, providers generally make a dividend adjustment, credited to long positions and charged to short ones. Financing, and the provider as counterparty, are part of the product.

Over time

Events in the life of the contract.

Quarterly reviews: The index is reviewed in March, June, September and December using market values on a set date, and changes take effect after the close on the third Friday of the month. Promotions and relegations are known in advance, and tracking funds trade in the closing auction that day.
Ex-dividend days: British shares customarily begin trading without the dividend on a Thursday. When several large members do so on the same Thursday, the price index opens lower by a visible number of points with no news behind it. A chart of the index shows a fall; a holder of the shares has received the cash.
Futures expiry: The futures expire on the third Friday of March, June, September and December and settle against a price taken from a special intraday auction in the member shares that morning. Positions are rolled to the next quarter in the days before.
Takeovers and changes of listing: A member that is acquired, or that moves its main listing to another country, leaves the index and is replaced by the highest-ranking eligible company outside it. Over time such departures have altered the sector mix of the index.

These describe how such events work in general. How GIO4X treats them on its own contract (adjustments, rollover dates, suspensions) is a trading condition and is not yet published.

Timetable and sources

What is scheduled, and where the facts come from.

Worth knowing the timetable of

The Bank of England Monetary Policy Committee’s scheduled decisions
The quarterly FTSE Russell index review in March, June, September and December
Ex-dividend Thursdays for the largest members
Results from the large oil, mining and banking members
The monthly United Kingdom inflation release from the Office for National Statistics
Quarterly futures expiry on the third Friday

Named, never dated: dates move. The Economic Events page explains the main releases.

Primary sources

FTSE Russell: Ground Rules for the FTSE UK Index Series
FTSE Russell: quarterly review announcements for the FTSE UK Index Series
ICE Futures Europe: contract specification for FTSE 100 Index futures
London Stock Exchange: dividend procedure timetable

Named by publisher and series, so each can be found from the publisher itself. GIO4X has no connection with them.

What would a trade in it cost?

The cost of a trade is the spread, any commission, and financing for each night it is held. The Cost Lab works the three out for a day trade, an overnight position and a longer hold, from figures you enter. A complete total also needs the swap rates, which are not yet published; the Lab shows which input is missing instead of a total that only looks complete.

Work it out in the Cost Lab

The risk, in ordinary type.

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.

UK100 is traded on margin. Educational information, not investment advice or a recommendation to trade.

Risk disclosure

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