The FTSE 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the largest market capitalization. The index was launched in 1984. FTSE stands for Financial Times Stock Exchange. The FTSE 100 is seen as an indicator of the strength of the UK economy and is on the most important indices in Europe. The FTSE 100 companies make up about 80% of the UK stock market.
Since its inception in 1984, most companies that formed the FTSE 100 have been removed from it. Members in the list of FTSE 100 are revised every quarter based on their performance and change in overall market capital.
About 60% of FTSE 100 companies' revenues come from sales made outside the UK. Interestingly, most companies listed in the index provide their earnings reports in US dollars. So, the FTSE 100 is one of the major world indices, thus sensitive to global events.
Thanks to its structure, oil and mining companies prevail in the FTSE 100, thus representing over 30% of the index.
To trade the FTSE 100 successfully, you should learn about the companies that comprise it. It is important to stress that the FTSE 100 is a market-capitalization weighted index covering a broad range of industries.