Trading Tips for the FTSE 100 (Updated 2024)

A list of the Top Brokers for FTSE 100 for October 2024:

1. Pepperstone
2. eToro
3. Plus500
4. IG
5. Saxo

Description of the Best Brokers for FTSE 100 for October 2024

Pepperstone offers robust trading options for the FTSE 100, one of the most widely followed stock market indices, representing the 100 largest companies listed on the London Stock Exchange by market capitalization.

Trading the FTSE 100 through Pepperstone is facilitated via Contracts for Difference (CFDs), which allow traders to speculate on the price movements of the index without owning the actual shares.

Pepperstone's platform allows traders to access the FTSE 100 index with ease, providing flexibility in trading hours that align closely with the UK market's opening times.

This flexibility enables traders to engage with the market during its most active periods, capitalizing on the highest liquidity and volatility.

Pepperstone offers competitive leverage on FTSE 100 CFDs, enabling traders to control larger positions with a relatively small amount of capital. For retail clients, leverage can go up to 1:20, while professional traders may access leverage up to 1:500, allowing for enhanced trading potential. This high leverage, however, also requires careful risk management due to the amplified exposure to market movements.

Trading the FTSE 100 with Pepperstone is supported by their advanced trading platforms, including MetaTrader 4 (MT4), MetaTrader 5 (MT5), TradingView and cTrader. These platforms are known for their user-friendly interfaces, sophisticated charting tools, and extensive range of technical indicators, which are crucial for conducting in-depth market analysis and executing timely trades. Additionally, the integration with TradingView offers powerful charting capabilities and access to a large community of traders.

Pepperstone provides tight spreads on FTSE 100 CFDs, ensuring cost-effective trading. The broker's Razor account, in particular, offers low spreads combined with a small commission fee, making it attractive for traders who prioritize minimizing transaction costs. The competitive pricing structure of Pepperstone helps traders retain more of their profits.

To assist traders in managing their risk effectively, Pepperstone offers several risk management tools, including stop-loss orders and take-profit orders. These tools are essential for setting predefined exit points, thereby protecting traders from significant losses and securing profits when the market moves favorably. Furthermore, the availability of negative balance protection ensures that traders do not lose more money than they have deposited.

Pepperstone provides extensive educational resources, including webinars, tutorials, and market analysis, which are valuable for both novice and experienced traders. These resources help traders understand market dynamics and develop effective trading strategies. Additionally, Pepperstone's customer support is available 24/5 via live chat, phone, and email, offering prompt assistance whenever needed.

Below content does not apply to US users

Founded in 2007, eToro is considered a very low-risk broker as it is highly regulated by the Financial Conduct Authority (FCA) in the UK and many other regulatory bodies elsewhere.

Opening an account is free and you can access a $100,000 demo account to test the system.

It offers 47 currency pairs for trading. Spreads for forex trading have recently been significantly reduced and range from a very competitive 1 to 3 pips for major currency pairs.

Typical spreads for EURUSD and USDJPY trades, for example, are just 1 pip.

You can see the full list of spreads on the eToro website.

You’ll need to deposit a minimum of $200 for Copy Trading, eToro's standout feature which allows you to follow other traders and copy their trades.

This forex broker is great for beginners due to its user-friendly interface and app and 24-hour customer support. It allows you to trade currencies, stocks and cryptocurrencies in one portfolio and the Copy Trading system is a great way to learn.

The company also offers trading courses and features a Learning Lab which houses a variety of tools to support clients with their trading experience.

To find out more, read our eToro review.

51% of retail investor accounts lose money when trading CFDs with eToro. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Plus500 instruments are available for trading exclusively via CFDs and the service offered on the platform is CFD-based.

Another user-friendly entry on our list of the best forex and CFD brokers in the UK is Plus500, providing an easy-to-use and accessible service.

You’ll find over 60 CFD currency pairs with competitive spreads, no commission and available leverage of up to 1:30.

Although MetaTrader and cTrader are not available, Plus500’s own platform is very user-friendly. It comes with a range of intuitive risk management features and is available on web and mobile.

Plus500 requires a minimum deposit of £100 if using a credit or debit card, and £500 if using bank transfer.

Plus500 UK Ltd authorized & regulated by the FCA (#509909).

IG is a great share trading platform for beginners thanks to its user-friendly interface and extensive educational resources.

Pros of IG include a wide range of trading instruments and markets, as well as the ability to access multiple account types and trading platforms. The platform also offers a demo account for beginners to practise trading strategies before investing real money.

However, IG isn’t the cheapest share trading platform, with relatively high trading fees and a minimum deposit requirement of £250 when paying by credit/debit card or PayPal.

In terms of additional fees, IG charges a commission fee for share trading, starting from £8 per trade. There’s also a custody fee of 0.25% per year for holdings of £250 or more.

Overall, IG is a solid choice for beginners looking for a user-friendly platform with extensive educational resources, but investors should be aware of its fees and minimum deposit requirements.

Saxo provides an excellent platform for trading on the FTSE 100, making it a strong choice for traders interested in accessing this key UK stock market index.

Saxo offers various instruments related to the FTSE 100, including CFDs, futures, and options. This variety allows traders to choose their preferred method of exposure to the index, depending on their investment strategy and risk tolerance.

Traders can use Saxo’s sophisticated platforms, SaxoTraderGO and SaxoTraderPRO, to trade FTSE 100 index products. These platforms offer advanced charting tools, real-time data, and comprehensive analysis features that are essential for following the FTSE 100 movements and making informed trading decisions.

Saxo provides options for leverage and short selling on FTSE 100 products, which can be advantageous for traders looking to capitalize on both upward and downward market movements. This flexibility is important in managing market volatility and enhancing potential returns.

Saxo offers detailed market insights and analysis, which are crucial for trading an index like the FTSE 100. These resources include expert commentary, economic indicators, and market news that help traders understand the factors influencing market movements.

Saxo is committed to trader education, offering a wealth of resources that help traders understand how to trade indices like the FTSE 100 effectively. These include tutorials, webinars, and articles on index trading strategies and market analysis.

As a globally regulated entity, Saxo offers a secure trading environment. This is particularly vital for traders who need assurance that their trades are executed in a safe and transparent manner.

What Is the FTSE 100?

The FTSE 100 is an index of the largest companies listed on the London Stock Exchange (LSE) with the highest market capitalization. It stands for the Financial Times Stock Exchange (it was once half-owned by the Financial Times and the London Stock Exchange).

The index first appeared in January 1984 and had a start value of 1,000. With various mergers, take-overs and folded companies, the list has changed completely.

Now solely owned by the LSE, the index reached its peak value in 2017 at 7,777.62 points.

The companies that feature on this index are often referred to as blue chip and are reviewed every quarter.

The FTSE 100 is used as an indication of economic health in the UK. As the index also features international companies, it can also be used to indicate a healthy global economy.

Whether they know it or not, the strength of the FTSE 100 is crucial to every person with a UK pension. Banks will likely invest part of your pension into FTSE 100 shares.

If the index crashes, you will lose whatever was invested the same way as if you had invested yourself.

What Is the Difference Between FTSE 100, FTSE 250 and FTSE 300?

The FTSE 250 is an index of the 250 companies following the FTSE 100. This list features more domestic companies rather than those established internationally.

Examples include:

1. Aston Martin
2. Balfour Beaty
3. Domino’s Pizza
4. ITV
5. Marks and Spencer
6. Pets at Home
7. Royal Mail
8. Signature Aviation
9. W. H. Smith
10. Workspace

The FTSE 350 is a combination of both indices.

What Are FTSE 100 Companies?

The FTSE 100 index is open to any company, regardless of the industry. As such, the list features companies from:

• Tech
• Oil
• Pharmaceuticals
• Banks

The top 10 companies from the FTSE 100, as of March 2021, are:

1. Royal Dutch Shell – Multinational oil and gas company with a market cap of £210.82 billion
2. HSBC Holdings – Hong Kong established bank with a market cap of £132.80 billion
3. BP – Oil and gas company based in London but operates globally with a $108.50 billion market cap
4. GlaxoSmithKline – Pharmaceutical company with a London HQ and a £74.63 billion market cap
5. British American Tobacco – Tobacco company with a £61.62 billion market cap
6. Unilever – Consumer goods with a $108,075 million market cap
7. AstraZeneca – Anglo-Swedish pharmaceutical company with a £100.8 billion market cap
8. Diageo – Alcoholic beverages with £73.9 billion market cap
9. Barclays – British investment and financial service with a market cap of £30.7 billion
10. BHP – Global commodities company with a market cap of £84.6 billion

How Is the FTSE 100 Measured?

The FTSE 100 is measured by market capitalization (market cap), which is another phrase for the market value.

The market cap is found by multiplying the current share price by the number of issued shares, then multiplying that number by the free-float factor.

The free-float factor is the number of shares available at the time of calculation.

These companies may feature on multiple indices, but they are all separate entities when it comes to their share prices.

As such, the value of an index rises and falls when the companies it features do.

As share prices continuously fluctuate, the companies with the most significant effect on an index are those with the biggest weight.

For example,

If HSBC were to see a slight fall in share prices and Ocado, an online food delivery service, were to see a considerable rise in share prices, the fall in the HSCB market cap will have a greater impact on the index because its value (weight) is bigger. The value of the FTSE 100 would therefore fall, rather than rise.

Rises and falls are sometimes referred to as points. At the end of the trading day, the FTSE 100 may have, for example, risen 0.8 points.

In 1984 the FTSE 100 opened on 1,000 points. Today it is valued at around 7,500 points, meaning that some companies have grown almost seven and a half times.

What Moves the FTSE 100 Market Price?

Share prices are always rising and falling because they are affected by many factors:

1. UK earnings. If the companies on the FTSE 100 all report good earnings, then the index value will increase. If they do poorly, the index falls. However, whilst the weight of the company does make a difference to the index value, the FTSE 100 is particularly vulnerable to the performance of British banks.

2. EU politics. Despite leaving the EU, the UK is still susceptible to events happening in Europe. As trade discussions are ongoing and companies are getting used to new policies following Brexit, stock prices will be significantly impacted.

3. Economic news. News releases such as interest rate decisions, UK GDP reports, manufacturing, housing, employment and inflation data all play a role in the value of a market share.

4. Global political and economic events. As many of the FTSE 100 companies trade in other markets, their share prices are affected when something happens in the countries of those markets. This could be anything from an election to a natural disaster.

5. Commodity prices. There are several heavyweight oil, gas and mining companies on the FTSE 100. Data shows that those companies related to commodities are affected more by what happens in the Middle East than in the UK.

6. Consumer behaviour. How much the public is spending and how well retailers are performing. The more people spend, the higher the share prices.

Frequently Asked Questions

Final Thoughts

Regardless of the style, type or index, trading and investing follows the same rules:

1. Do your homework – Make sure you know exactly how and what you are trading. Become familiar with all the tools, indicators and charts you have available to you.
2. Manage your risk – A lot of risk management comes from knowing what you are doing. But having an awareness of your money and taking advantage of risk management tools will help prevent any unnecessary (and costly) mistakes.
3. Be aware of the world – What is happening in economies on the other side of the world? Are there any political movements that may threaten a trade agreement? How are the companies on an index performing across the globe? Keep up to date with the news from around the world to prevent you from getting caught out.
4. Trust your instincts – If something seems too good to be true or you are having doubts, do not go ahead with the trade.

WikiJob does not provide tax, investment or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.