The FTSE 250 Index is an index of companies on the London Stock Exchange which rank from the 101st to the 350th company in order of total market value. A separate index known as the FTSE 100 is used to rank the top 100 companies. The Index is ranked by capitalisation weight. This means that each member of the Index is weighted depending on the total market value of their shares. As these values fluctuate daily, so too does a constituent’s place in the FTSE 250.
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The FTSE 250 uses a capitalisation-weighted index, otherwise know as a market-value weighted index. …[Read more below]
…[Continued] Stock prices change on a daily basis. This affects the stock’s index value on the FTSE 250. The effect the change has on the value of the company is calculated thus: company’s total number of outstanding shares multiplied by the new share price. Thus, the movement of companies on this index is a direct reflection of current market events.
To be on the FTSE 250 is to be considered one of the major financial players in the UK stock market. Companies are promoted to or demoted from the FTSE 250 four times a year and the index represents around 10% of UK market capitalisation.
Designed to monitor industry and mid-cap UK market segments, the FTSE 250 is a measure of companies outside of the large cap constituents of the FTSE 100. The Index constituents are traded on the SETS and SETSmm systems of the London Stock Exchange.
A large proportion of the companies listed on the FTSE 250 are investment trusts, companies which invest shareholders’ funds. Similar indices are the FTSE 100 and the FTSE 350 index, which list other major companies within the UK. Depending on a trader’s interests, he may choose to trade solely on the FTSE 250, or a combination of different indices.
Index tracking fund, performance benchmarks, ETFs and derivatives are all created by the FTSE 250. Before trading, all stocks are screened to ensure liquidity. Stocks are weighted as free-float. The Industry Classification Benchmark, a global standard, is used to calculate the FTSE 250. A public set of rules is used to manage the index and an independent committee is used to monitor it. This committee consists of leading professionals from a range of fields.
At Accendo Markets, we provide you with timely information regarding the FTSE 250, as well as on a range of other market issues. With experience in taking a personalised approach to trading, we can deliver you with a knowledgeable and friendly service. Our competent and personable traders are on hand to answer any questions you may have about trading shares on the FTSE 250. State-of-the-art trading platforms will enhance your trading experience further.