The essentials
- The FTSE 100 index tracks around the 100 largest eligible companies on the London Stock Exchange, weighted by free-float market value.
- Membership is reviewed every quarter; London's continuous trading session runs from 08:00 to 16:30 UK time.
- Many of its companies earn much of their revenue abroad, so the index often reacts to the pound as well as to the UK economy.
The FTSE 100 index measures the combined value of the largest companies listed on the London Stock Exchange's main market. It is calculated by FTSE Russell, part of the London Stock Exchange Group, and was launched on 3 January 1984 with a starting value of 1,000. When commentators say "the London market rose today", they usually mean this index.
How the FTSE 100 index is built
Companies are ranked by market value, and eligibility depends on rules about listing, nationality, free float and liquidity. Each company's weight in the index reflects its free-float market capitalisation, the value of shares actually available to investors, so the largest companies have by far the biggest influence on the index level. A 1% move in one of the heaviest constituents shifts the index much more than the same move in one of the smallest.
The FTSE 100 is a price index: it tracks share prices but not dividends. A total-return version, which assumes dividends are reinvested, is also calculated, and over long periods the gap between the two is substantial.
How FTSE 100 companies enter and leave
FTSE 100 companies are reviewed quarterly, in March, June, September and December. To limit needless turnover, a company outside the index is added if it rises to 90th place or higher in the ranking, and a member is removed if it falls to 111th place or lower. Mergers, takeovers and delistings trigger changes between reviews. Membership shifts over time with the economy: banks, miners, energy, consumer goods and pharmaceutical companies have long made up a large share of the index.
When the market is open
Continuous trading on the London Stock Exchange runs from 08:00 to 16:30 UK time on weekdays, with an opening auction just before and a closing auction just after. The index is calculated throughout the session. Outside those hours, index CFDs and futures may still trade, which is why a broker's quote for the index can move overnight while the official index is static. Our market board shows whether London is open now.
Reading a FTSE 100 chart
A FTSE 100 chart plots the index level over time. A few things are worth knowing before drawing conclusions from one:
- It excludes dividends. Because the FTSE 100 has historically had a relatively high dividend yield, the price chart understates what investors received.
- It is in pounds. A rise in the index can coincide with a fall for an overseas investor if sterling weakens.
- The scale matters. Over long periods, a logarithmic scale shows percentage changes more fairly than a linear one.
Pages labelled "FTSE 100 live" or "FTSE index live" may show real-time or delayed values depending on the data licence; the small print usually says which. The number quoted as the FTSE 100 today on a news site is the official index value, while a trading platform shows its own tradable price for a contract based on it, which can differ by the spread and by financing adjustments.
The FTSE 100 among UK indices
FTSE Russell calculates a family of UK indices. The FTSE 250 covers the next 250 companies by size, generally with more domestic businesses. The FTSE All-Share combines the large and mid-sized companies with smaller ones to give a broad view of the London market. Comparing them shows whether a move is about the largest multinationals or about the UK economy more widely.
Why the pound matters
A large part of the combined revenue of FTSE 100 companies is earned outside the UK, in dollars and other currencies. When the pound falls, those overseas earnings are worth more in sterling, which can support the index. When the pound rises, the reverse applies. This is one reason the FTSE 100 does not always track the domestic UK economy closely, and why the more UK-focused FTSE 250 can behave quite differently.
Ways investors gain exposure
- Index funds and ETFs that track the FTSE 100, usually with low annual charges. In the UK, these can be held in an ISA, within the £20,000 annual allowance for 2026/27.
- Individual shares in the constituent companies, with UK stamp duty of 0.5% on most purchases.
- Leveraged products such as CFDs and spread bets, capped at 20:1 for UK retail clients on major indices.
Illustrative example: a £1-per-point position with the index at 8,200 has an exposure of £8,200 and needs £410 of margin at 20:1. A 60-point rise to 8,260 gains £60; a 70-point fall on a £2-per-point position loses £140. The figures are for illustration, not a forecast.
For the wider background on shares, read how the stock market works; for the costs of each route, see trading fees explained.
Reader questions
How many companies are in the FTSE 100?
One hundred companies, although the number of share lines can occasionally differ slightly where a company has more than one class of shares in the index.
Does the FTSE 100 include dividends?
The headline index does not; it is a price index. FTSE Russell also calculates a total-return version that assumes dividends are reinvested.
Why does my broker's FTSE price move when London is closed?
Brokers quote prices for index CFDs and futures outside the London session. The official index only updates while the exchange is open.
Sources
- FTSE Russell, FTSE UK Index Series ground rules
- London Stock Exchange, trading hours and auction schedule
- UK Financial Conduct Authority, CFD rules for retail clients
- HM Revenue and Customs, ISA allowances and Stamp Duty Reserve Tax