We’ve put together a list of the best brokers and platforms for trading the FTSE 100 (UKX) including City Index, IG, CMC Markets, Pepperstone and Saxo Markets. We have compared account types, trading spreads, overnight financing rates, plus interviewed, reviewed and tested the brokers trading platforms. We’ve also provided a guide on how to trade the FTSE 100, what moves the market and some UKX trading tips.
Compare FTSE 100 Trading Platforms
|FTSE Trading Platform||Spreads & Fees||Overnight Financing||CFDs||SpreadBetting||DMA||Risk Warning||More Info|
|1||SONIA +/-2.5%||✔️||✔️||❌||70% lose money when trading with this provider.||Visit City Index|
|0.005%||na||✔️||❌||✔️||60% lose money when trading with this provider.||Visit IBKR|
|1||SONIA +/-0.0082%||✔️||✔️||❌||66% lose money when trading with this provider.||Visit CMC Markets|
|1||SONIA +/-2.5%||✔️||✔️||❌||79.3% lose money when trading with this provider.||Visit Pepperstone|
|1||SAXO RATE +/-2.5%||✔️||❌||✔️||70% lose money when trading with this provider.||Visit Saxo Markets|
|1||SONIA +/-2.5%||✔️||✔️||✔️||73% lose money when trading with this provider.||Visit IG|
|1||SONIA +/-3%||✔️||✔️||❌||69% lose money when trading with this provider.||Visit Spreadex|
|1.7||SONIA +/-2.8%||✔️||✔️||❌||77% lose money when trading with this provider.||Visit XTB|
What is the FTSE 100 Index?
The FTSE Index stands for Financial Times Stock Exchange 100 Index. This is the primary blue chip stock index of the London Stock Exchange, often referred to as the ‘Footsie’ Index. The number of stocks in the index is capped at 100.
The index is a very popular stock market index in the UK. Formed in 1984, the index is currently maintained by the FTSE Group. The index is calculated throughout a trading session regularly.
The FTSE 100 Index is capitalisation weighted, meaning that larger stocks have a larger impact on the index movements. Below is a snapshot of the 10 largest stocks in the FTSE 100 Index.
The largest stock in the LSE right now is the banking giant HSBC Holdings, with a market cap of £117 billion. This is followed by the oil producer BP at £98 billion. The biotech behemoth AstraZeneca is valued at £97 billion.
Here is where you can trade FTSE 100 index options for UK shares.
Can you trade the FTSE 100 Index?
Yes, you can. There are multiple financial products derived from the underlying FTSE 100 Index that you can trade with, including:
- Index Futures (formerly LIFFE, now at ICE)
- Options (ICE)
- Exchange-Traded Funds
- Investment Funds
- Spread trading
The biggest ETF based on the FTSE 100 Index is the FTSE 100 ETF (ticker: ISF). This ETF is gaining popularity because of the ease of trading, unlike futures or options where there are rollover costs and expiry dates.
On index futures, they usually expire on March, June, September, and December.
Here is how to invest in ETFs.
Top Ten FTSE 100 Companies
|Royal Dutch Shell ‘A’||2,238.50p||£93.80b|
|Royal Dutch Shell ‘B’||2,221.00p||£82,91b|
|British American Tobacco||3,041.50p||£69,64b|
Source: London Stock Exchange (see this FTSE Link for a calculation)
What is the attraction of FTSE 100 Index?
FTSE stock Indices (100 and FTSE 250) are closely watched. The index is attractive to investors and traders alike because:
- FTSE 100 stocks are highly international and these companies derived their earnings globally
- FTSE 100 offers good liquidity – as some of the FTSE stocks are huge (e.g. HSBC, BP, and GSK)
- FTSE 100 pays relatively good dividend yields compared to the UK bond yields
The City of London is a globalised arena and many companies choose to list there. Investors can get a good spread of stocks from across the world.
What drives the FTSE 100?
Stock markets are often driven by a wide variety of factors.
For the UK market, the number one factor is obviously Brexit. However, bear in mind that many FTSE 100 stocks are globalised. Brexit is one only factor impacting their businesses. The primary and instant impact that Brexit can hit FTSE 100 stocks is through the Sterling exchange rate.
Other important factors include:
- Macro factors (e.g. GDP, unemployment, business indicators etc)
- Monetary factors (e.g., Quantitative Easing, rates movements, yield curve etc)
- Technical factors (e.g., new highs or lows)
- Earnings factors (e.g., profitability and earnings momentum)
Another important factor to watch for is commodity prices. Why? Because the FTSE 100 Index has large mining and energy sectors. BP, Royal Dutch Shell, BHP, Rio Tinto, Anglo American, and Glencore are some of the largest energy and mining groups in the world. And they are all in the FTSE 100 index.
Seven-Point Guide on Trading the FTSE 100
To trade the FTSE 100 profitably requires a good trading strategy. The following tips may help you to maximise your chances of trading the FTSE 100 successfully over the long term.
- Understand your requirements for trading the FTSE 100. Are you an intra-day or positional trader? Do you invest for the long term? Are dividends important?
- Research various technical (or fundamental) indicators to support the trading objective. There are many technical indicators that you can use, including
- Trend indicators like moving average
- Support & resistance levels
- Patterns like breakout and reversals
- Backtest these indicators if they are profitable over time. Select a few that you can understand. Check their pitfalls and signal variations over time. Put these indicators into a trading software and backtest. Can you withstand the drawdown?
- Select the indicators that best suit the objective. Once the initial back test research is completed, setup a mock testing period of, say, six weeks. Assess the results. Are they good? Which type of indicators works better?
- Include risk management factors in your assessment. Important factors like position sizing, leverage levels, stop loss levels and risk-reward ratios must be specified. Trading without risk management is like driving without brakes and safety belts.
- Select trading platforms that support your operations. Capital requirements, platform fees, and trading capability are all important factors to look for. See the comparison table above.
- Commit capital and go live. Make sure that you drip feed capital into new strategies because there may be many things to iron out before you’re comfortable with it.
Alternative Indices For UK FTSE 100 (FTSE 100) Index Trading
You can read about the major indices in our guide to the best indices for index trading.
- Dow Jones Industrials Average (US 30)
- Standard & Poor’s 500 (S&P 500)
- Nasdaq (Composite and Nasdaq 100)
- Dow Jones Industrials (DJIA)
- CAC 40 (France 40)
- DAX (Germany 30)
- European Stocks to Buy Now
- Japan 225 (Nikkei 225)
- Hong Kong (Hang Seng Index)
FTSE 100 Trading FAQ:
The FTSE 100 is what is known as an equity index. It is a measure of the performance of the top 100 UK shares. These are typically the largest listed companies in the UK, that meet specific selection criteria. The index was created in 1984 and replaced the FT30 index as the leading UK equity benchmark. The original value of the index at inception was 1000 index points, over its lifetime the index has risen in value sevenfold.
Index membership is reviewed quarterly with demotions and promotions into the index, taking place after the review. Index membership can also change as a result of takeovers of constituent companies or business failures.
Who are the best brokers for trading FTSE 100?
It very much depends on what you are looking for from your from your broker if it’s 24 hour pricing and tight spreads plus access to thousands of other products then you will probably want to trade with one of the larger brokers such as IG Group or Saxo Bank. But if you want a more personalised service then you might prefer a smaller broker such as Spreadex.
Your choice of broker will also be influenced by the products you want to trade for example, Pepperstone have a reputation for excellent customer service but they don’t currently offer spread betting. So if you want to bet on the FTSE rather than trade it they won’t be for you.
You can compare brokers and decide which one is the best fit for you by using our comparison tables, either through a general trading account, CFD trading platform or Spread betting broker or if you are interested in investing in a FTSE 100 tracker through ETFs.
Trading on indices has always been a solid choice, offering the obvious advantage of constant, 24-hour movement as well as good liquidity. The FTSE 100 is a popular index to trade for a number of reasons, notably its smaller tick size, particularly when compared to other European indices such as the Dax – £5 per point versus €25 per point respectively.
What is FTSE 100 futures trading?
Futures contracts are derivatives that allow traders to speculate on the future price of a given commodity or instrument; in this case, the future value of the FTSE100 index.
The FTSE 100 futures contracts trade on a quarterly expiry cycle of December, March, June and September. Each of these contracts reflects the market’s expectations for the value of the FTSE100 index at that future point in time. As a contract month expires, so another is added into the cycle.
As is common to many financial futures contracts, the FTSE 100 futures are cash-settled. Meaning buyers and sellers of the contract pay or receive money based on the outcome of their trade. Without the need for delivery of the stocks that make up the index.
All trades are cleared and settled through a central clearing house which becomes the counterparty to those trades. Trades are placed on a margin basis with an initial margin or deposit required at the outset of the trade and variation or maintenance margin provided as needed through the trades lifetime.
What is FTSE 100 CFD trading?
All cash-settled financial and commodity contracts are in effect CFDs or Contracts For Differences. In which, the counterparties to a trade (the buyer and the seller) pay or receive money, at the settlement of their trade, rather than making or taking delivery of the underlying instruments.
A CFD on the FTSE 100 is no exception, such contracts closely resemble the futures contracts described above, but there are some key differences.
Firstly FTSE 100 CFDs trade OTC or Over The Counter and not on a dedicated exchange.
Nor are they centrally cleared which means that the counterparties to a trade are the customer and their CFD provider.
CFDs do not have a fixed expiry date and are not subject to fixed contract sizes.
The FTSE 100 futures contract size is £10.00 per index point. Such that when the index is valued at 7000 points, the futures contract value is £70,000.
However, CFD traders can typically deal in much smaller sizes, for example, at £1 per point, or a tenth of the value of the futures contract.
What is FTSE 100 spread betting?
A FTSE 100 spread bet is very similar to both the futures contract and the FTSE 100 CFD. There is one key difference though, and that is that the deal is structured as a bet and not a trade.
Spread bettors trade in pounds or pennies per point and bet on the rise or fall of the FTSE 100 index. Their bookmaker is the counterparty to their bet.
Bookmakers can offer a range of bet durations, for example, daily, monthly or quarterly bets. Perhaps the most significant difference between a spread bet on the FTSE 100 and CFD trade on the index is the tax treatment of any profits made.
Under current UK legislation profits made from betting by individual UK taxpayers are not subject to tax. However, losses arising from betting cannot be offset against capital gains made elsewhere. Profits resulting from CFD trades are subject to tax, though CFD losses can be offset.
The tax treatment of spread betting has made it very popular among retail traders. Unlike fixed-odds betting, however, your potential losses are not limited to your initial stake when you spread bet.
What is FTSE 100 ETF trading?
ETFs or Exchange Traded Funds are simply open-ended funds that aim to replicate the performance of a given index, sector or investment style.
For the most part, ETFs offer what is known as passive investing that is they aim to track a particular benchmark rather than outperform it. ETFs are tradeable in the same way that individual shares are.
As such ETFs offer a low-cost way for investors to replicate index or sector performance, and they allow traders to quickly gain exposure to groups of stocks or market themes.
The ETFs, which track the FTSE 100, aim to mirror its performance and will typically own a basket of FTSE 100 shares or derivative contracts over the same or similar stocks to do so.
Investors and traders who are bullish of the index buy an ETF while those who are bearish of the FTSE would sell it. It is possible to sell short of an ETF, i.e. sell it in the hopes of repurchasing the position at a lower price for a profit, but it’s best to check the requirements for doing so with your broker before proceeding.
There are more than half a dozen ETFs which track the FTSE 100 index, though the Ishares FTSE 100 ETF (ticker ISF) is probably the best known and most widely followed among them.
Where to get live streaming FTSE 100 charts?
The trading platforms of most major brokers will offer users a FTSE 100 chart; however, you may wish to consider alternatives, and there are a variety of sources for this.
One of the most straightforward sources is Google, which displays real-time prices and charts for the FTSE 100 and other UK indices. To find this data for the FTSE 100 type UKX into the search bar in google and hit return. Google provides live line charts over a variety of time frames, and you can make comparisons between the FTSE and other instruments.
Markets Insider, part of the Business Insider stable, is another useful resource that offers configurable live charts of the FTSE 100 as well as price data for its components, alongside news headlines etc.
However, if you are looking for something more sophisticated in terms of charting functionality, then you might like to consider Tradingview a dedicated charting platform and community. There are free and paid plans on the service, as well as fully featured or simple charts.
Note that free plans are supported by advertising. Tradingview does not have a live price for the FTSE 100 index itself, but it does carry both the prices and charts of FTSE 100 ETFs and selected FTSE 100 CFDs.
What is FTSE 100 swing trading?
Swing trading is a trading style that aims to identify the beginning or end of trends within the price action of an index or instrument; in this case, the FTSE 100 index or derivatives thereof.
Swing trading can be a day trading style without positions held open overnight, though some swing traders will run positions over more than one trading day if they believe the momentum in the index justifies it.
The FTSE 100 swing trader is looking for signals within price action to help determine what the medium-term move in the index will be. For example, an ongoing series of higher highs and higher lows, on say the five and fifteen-minute charts, after a period of consolidation, could suggest there is upside momentum and a new uptrend is in the offing.
While a series of lower highs and lower lows over various time frames, after a good run, could well mean that that move in the FTSE100 has come to an end and move lower is now likely.
Swing traders will look to identify these trend changes as early as possible. However, they tend to use indicators to provide confirmation and to avoid false breakouts. Swing traders use stop losses to manage their risk and will often trail these behind profitable positions and may add to these as and when the strength of a trend develops or increases.
Are there any good FTSE 100 trading systems?
Trading systems are only as good as the rules that govern them and given the number of variables in play on any given trading day, it’s unlikely that anyone system will be effective all of the time. After all, even the most advanced quantitative hedge funds find it difficult to make money consistently in the current climate.
That said, having a rule-based system that you follow, particularly around money management and position sizing is a sensible idea, as is being aware of the factors that can and do influence the FTSE 100 index.
The index is what is known as market-cap-weighted, that means that the biggest companies within the index have the largest influence over changes in its value. Such that if the shares of the largest half a dozen companies in the index are moving higher, then it’s likely the index will be doing the same and vice versa.
The FTSE 100 also contains many overseas earners, (as much as 70% of FTSE 100 revenues come from abroad) whose share prices are sensitive to fluctuations in UK exchange rates and global trade. A weaker pound has historically benefitted these overseas earners and therefore the index, while barriers to trade or geopolitical instability are seen as a negative influence.
How do you invest in the FTSE 100?
Investing in the FTSE 100 implies taking a long term view with time horizons that extend over months or years. As such short-term speculative instruments such as spread bets and CFDs may not be suitable.
ETFs are becoming increasingly popular among investors who wish to take a longer-term view on a particular index or sector. That’s because ETFs offer a low cost, efficient way to gain market exposure. Moreover, as we noted earlier an index tracking ETF such as ISF (the IShares FTSE 100 ETF) only tries to mirror the performance of the underlying index rather than outperform it, which is much harder to achieve.
Investors can hold ETFs on the FTSE 100 within stocks and shares ISAs and self-invested pension plans or SIPPS as they are known. However, as with any investment strategy, it’s important to assess your risk concentration and individual requirements in terms of income versus capital growth and to seek professional advice.
What are the FTSE 100 trading hours?
The FTSE 100 index itself is calculated daily in real-time from the opening auction at 08.00 am in London until the closing auction at 16.35pm, Monday to Friday, excepting UK Bank Holidays.
However, FTSE 100 futures are traded in London over a much longer period, which runs between 01.00 am to 9.00 pm. What’s more many CFD and spread betting providers offer prices in the FTSE 100 24 hours per day, five days a week. Prices within standard UK market hours will typically be tighter and will see more activity than those made out of hours. As a rule of thumb the farther you are away from the home session then, the wider the prices are likely to be.
How liquid and volatile is the FTSE 100?
The FTSE 100 is one of the most widely traded and recognised stock indices in the world and contains some of its best known and largest companies, many of which trade very freely.
The index itself does not trade but instruments based on it such as the FTSE 100 futures, CFDs and ETFs which track it, do.
Liquidity in the index constituent stocks and the instruments that track the index is at its highest during the trading day in London, the opening and closing auctions are among the busiest and most liquid points of the day alongside mid-morning and the period after lunchtime in London, just ahead of the opening of Wall Street.
As UK and European markets close up for the day volumes and liquidity both fall away though it’s still possible to trade relatively freely while US Markets are open.
However, spreads can widen and liquidity fall away after the US close. Prices are available during the Asian sessions however they maybe wider than those found in London trading and can be made in smaller sizes. Larger trades can, therefore, have an outsize effect on price movements.
On a historical basis, the FTSE 100 is not a particularly volatile index with its mean 30-day volatility. since the year 2000 coming in at 21.5% on a scale of 0 to 100, according to data from FTSE Russell who manage the index.