The FTSE 100 is an index, consisting of the 100 largest companies (included) in the United Kingdom, in terms of market capitalisation. Not only this gives an indication of how well the efficiency of large companies UK, but it is a pretty good indicator. In fact, there are three different ways can I trade this index.
First of all, could you consider trading FTSE 100 options. If you are sure that the price of the FTSE 100 will increase in future, you can buy a call. However if you believe this index is overestimated, could you think about the option to buy.
Options trading is a very complex issue, and not be a means of personal trade himself. However it is useful for the negotiation of the FTSE 100 in both directions.
A second way to trade this index is through the spread betting. This is not available in every country, but here in the United Kingdom has two main benefits-is much easier to understand than negotiation options, and you do not have any tax on any profits made.
Spread betting is relatively straight forward. If the FTSE 100 trading on 6000, can be quoted a price of daily 5999-6001. So if you think the price is set to rise before the end of the day to go long at 6001. You can close this location (for a profit or loss) anytime you want, or you can simply leave the close automatically at the end of the day. Your profit is your stake per point multiplied by your profits (or losses) at the location of the trade is closed.
Can I trade this index intraday basis, as in the example above, or you can take longer posts using contracts expire several months away. So it is very easy to go more or less than this index whenever you want.
A final way in which they can trade this index is one of negotiate an ETF FTSE 100. These are very popular with investors stock market, because you can buy and sell them just as you would with ordinary shares. Can be placed in an ISA or pension fund and they are ideal if you believe this index will grow in months or years to come.
So as you can see, there are several ways to trade in the FTSE 100. Plus it's just so easy to go short term like to go too, so you don't have to wait patiently in the margin, when you think the market is grossly overvalued.
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