UK100 (FTSE): how the index works and what moves it

• UK100

What the FTSE index is

The “FTSE 100” index, often called simply the FTSE or the Footsie, tracks the largest companies listed on the London Stock Exchange. It is weighted by market capitalisation, which is share price multiplied by the number of shares. The biggest companies move the index the most.

On trading platforms the index usually appears as UK100. When you trade UK100 at a broker, you trade a CFD (contract for difference). A CFD is a contract that pays the change in the index price. You do not own any shares. For the general mechanics, see Index CFDs explained and the overview of stock indices.

Trading leveraged CFDs can lose money fast. A small move against your position can remove a large part of your margin.

What drives UK100 prices

Global earners

Many large FTSE companies earn most of their revenue outside the United Kingdom. They report results in pounds, but much of their income comes in dollars and other currencies. The index therefore reflects the world economy, commodity cycles and exchange rates more than the UK economy alone.

Commodity and bank weight

Compared with US indices such as USTEC or US500, the FTSE has a heavy weight in these sectors:

• Energy: oil and gas producers, which follow crude prices (see Energies).
• Mining: miners of metals and minerals, which follow metal prices and demand from large importers (see Metals).
• Banks and insurers: their profits depend on interest rates, credit quality and the shape of the yield curve.
• Consumer staples and pharmaceuticals: defensive sectors that tend to move less in downturns.

Technology has a small weight. For this reason UK100 can behave very differently from Nasdaq-based indices on the same day.

Inverse link to GBP

A weaker pound raises the sterling value of overseas earnings. Large exporters and multinationals in the index often rise when GBP falls. A stronger pound can have the opposite effect. Traders often see UK100 and GBPUSD move in opposite directions.

This link is a tendency, not a rule. Bank of England decisions, UK inflation data or global risk sentiment can push both in the same direction. If you trade UK100 and a GBP pair at the same time, check whether the two positions add to your risk or offset it. For pair basics, see Currency pairs.

Interest rates and macro data

Bank of England rate decisions, UK inflation and employment data, oil inventories and global growth data can all move the index. Index CFDs also react sharply to high-impact news. The Fundamental analysis guide covers how to read these releases.

Calculating pip value and margin

UK100 is priced in pounds. If your account is in USD or another currency, the value of each price move is converted into your account currency. Contract size and pip size are set per instrument. Read them from the specification in the platform rather than assuming they match another index.

Use the calculator to see the value of a pip for your lot size, in the quote currency and in your account currency:

Margin is the amount the broker sets aside to keep a position open. Use this calculator to see the margin required to open a position at a given leverage:

More tools are on the Calculators page.

UK100 at Exness: what the sources say

Exness lists indices among the instruments on the Standard account: forex, metals, cryptocurrencies, energies, stocks, indices. The specific UK100 conditions are not all covered by the sources we use. Check the specification in the platform before trading. Spread, contract size, minimum and maximum volume, swap and margin rules can change.

What Exness states in its own materials:

UK100 is not in the list of exceptions, so its leverage is fixed. Exness does not apply the dynamic leverage of the US indices to it. The exact fixed value is shown in the instrument specification.

Index availability can depend on account type, platform and account currency. Check this in the Exness personal area or on the official site. Account details are on the Account types page. Swap rules for overnight positions are on the Swap fees page.

Legal position in Pakistan

Pakistani regulators have published warnings that apply to offshore trading platforms in general:

• On offshore products: per the SBP, the purchase of offshore forex/margin/CFD products by Pakistani residents violates section 4(1) of FERA 1947.
• Also, per the SBP, remitting foreign exchange to overseas forex/margin/CFD platforms is not allowed through any payment channel (FERA s.5(1)).
• On offshore platforms: per the SECP, offshore platforms have no Pakistani licence or oversight and offer no legal protection or recourse.

Read Law and regulators and Regulation and Safety before you decide anything. If you want exposure to listed shares through a local channel, see PSX basics.

Practical points before trading UK100

• Check the trading session. Liquidity is usually thinner outside London hours, and spreads can widen.
• Watch oil, metal prices and GBP. Sector weights mean these often explain index moves.
• Set a stop-loss and size the position with the calculators above. The Risk management guide explains position sizing.
• Practise on a demo account first to see how the instrument moves and how margin changes.

Frequent questions

Are UK100 and the “FTSE 100” the same thing?

UK100 is the name brokers commonly use for a CFD on the FTSE index. The CFD follows the index price, but you do not own the underlying shares.

Why does UK100 often rise when the pound falls?

Many index companies earn abroad. A weaker pound raises the sterling value of those earnings. This is a frequent tendency, not a fixed rule.

Is the leverage on UK100 at Exness fixed?

Exness states that leverage is fixed for most indices except JP225, USTEC, USTEC_x100, US500, US500_x100, US30, US30_x10. UK100 is not among the exceptions. Check the exact value in the platform specification.

What are the UK100 trading hours?

Exness says index hours differ by underlying instrument; servers run on UTC+0. See the instrument schedule in the platform for UK100.

How do I know what a pip is worth on UK100?

Use the pip calculator on this page. Take the contract size and pip size from the instrument specification in your platform.

Can I lose more than my deposit?

Exness states: balance reset to 0 after stop out. You can still lose your whole balance quickly with leveraged CFDs.