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What is the FTSE 100 stock index and how does it work?

The FTSE 100 is a stock market index run by FTSE Russell. It tracks the 100 largest eligible companies on the London Stock Exchange's Main Market, weighted by the value of their freely tradable shares, and FTSE Russell reviews the membership every quarter.

By MarketFrame · Published 9 October 2026 · Updated 9 October 2026

In short, the FTSE 100 is a single number that sums up how the UK's biggest listed companies are moving together. Bigger companies count for more. FTSE Russell decides membership with published rules, and the level is measured in points rather than pounds. The sections below explain each part, so a headline about the index makes sense.

What the FTSE 100 index is

An index sums up a group of companies in one number. You don't have to check 100 separate share prices: the index tells you roughly which way the group went.

The FTSE 100 is the best known UK example. LSEG says it was launched in 1984 with a starting level of 1,000. Every reading since then is measured against that base, so the level is a count of points. It only means something when you compare it with an earlier reading of the same index.

Nobody buys "a FTSE 100" at that number the way they would buy a share at a price. The level is a yardstick.

Who runs it and who is in it

FTSE Russell runs the index. It is part of LSEG, the group that also owns the London Stock Exchange. Its rules are published in the FTSE UK Index Series Ground Rules. FTSE Russell applies them at each review, so membership follows the rules and does not depend on anyone's view of a company.

To be eligible, a company's shares must, among other tests:

FTSE Russell then gives each company a nationality, and the FTSE 100 is made up of the largest 100 UK companies by full market capitalisation. "UK" here is a label set by the rules. It doesn't depend on where the company does business. A company incorporated outside the UK can qualify if it meets extra conditions, such as publicly committing to the UK Corporate Governance Code and the Takeover Code as far as practicable. Many members earn most of their revenue overseas.

Membership changes every quarter, so this guide doesn't list the companies. For the companies MarketFrame currently covers, see FTSE 100 company coverage.

How the index is calculated: market capitalisation and free float

Market capitalisation is the total value the market puts on a company's shares. The index uses it in two ways:

  1. Ranking. To decide who is in, FTSE Russell ranks companies by full market capitalisation.
  2. Weighting. Once a company is in, its weight is adjusted for free float. Shares held by governments, founders or other strategic holders are left out, so only the shares available to ordinary investors count.

In practice:

The exact formulae are in FTSE Russell's separate Guide to Calculation Methods, which the Ground Rules point to.

How companies join and leave: the quarterly review

The list changes over time. FTSE Russell reviews it every quarter, in March, June, September and December. Changes are put in place after the close of trading on a Friday and take effect when trading opens the following Monday.

A buffer stops companies churning in and out:

A company ranked between 91st and 110th keeps its current status. If more companies qualify to join than to leave, or the other way round, FTSE Russell balances the changes so the index always has 100 members.

There is also a fast entry rule. A large new company, including one that has just floated, can join between reviews. It must rank 90th or above and have an investable market value of at least £1 billion, and it is added after the close on its fifth business day of unconditional trading. Takeovers and delistings can also force changes between reviews.

So the formal answer to "how often does it change?" is quarterly. Many reviews change only a few names.

What the index level does and does not tell you

The level tells you which way the group has moved, and by how much in weighted terms. Compare it with last month's reading and you know whether the group is higher or lower.

It doesn't tell you:

An index level records what has already happened. It carries no forecast.

FTSE 100 compared with the FTSE 250 and FTSE All-Share

The Ground Rules define the three like this:

Each one answers a different question. The FTSE 100 shows how the largest companies are moving, the FTSE 250 shows the mid-sized tier, and the All-Share gives the broadest view of the three. Seeing the FTSE 100 rise tells you nothing certain about the FTSE 250 on the same day.

Why an index can move without most companies moving

Because the index is weighted by value, a handful of the largest members can pull the whole figure up or down while most of the rest barely move.

That means the index can rise on a day when most members fell, or the other way round. There is no contradiction. The level reflects weighted movement, and a few heavyweights carry much of it.

Keep this in mind when a headline says "the market rose". It describes the weighted group and says little about how a typical member did.

How to read news about the FTSE 100

First, work out what the headline is about. It could be the index level, one company or a whole sector, and headlines often blur the three.

Then ask:

Sector coverage can help explain a move, because the larger sectors carry a lot of weight. MarketFrame tracks sectors such as banks and mining day by day.

Where MarketFrame fits

Each morning, MarketFrame reads the UK business news on every FTSE 100 company. It checks which stories are really about each company and scores the tone of that coverage from −10 (clearly bad news for the company) to +10 (clearly good). Headlines come from Google News, Yahoo Finance and 49 UK business and trade RSS feeds. Results are grouped by company and across 17 sectors and are free to read, with an archive starting on 30 September 2026.

The tone score describes how the news reads. It is not share-price data, a forecast or investment advice, and a positive score does not mean a share price will rise. Start with the daily hub at FTSE news, or browse every past day in the daily overviews.

Questions people ask

What is the FTSE 100 index?

It is a stock market index run by FTSE Russell, part of LSEG. It tracks the 100 largest companies by full market capitalisation that meet its rules for the London Stock Exchange's Main Market, and it shows how that group moves as a whole.

How often does the list of FTSE 100 companies change?

FTSE Russell reviews the list every quarter, in March, June and September and December. A company joins if it rises to 90th or above and leaves if it falls to 111th or below. Fast entry rules can bring in a large new company between reviews, and takeovers can also force changes.

Is the FTSE 100 the same as the UK stock market?

No. It covers only the largest eligible companies. The FTSE 250 covers the next 250, and the FTSE All-Share combines the FTSE 100, the FTSE 250 and the FTSE SmallCap, so it gives a much broader view.

What is the difference between the FTSE 100 and the FTSE 250?

The FTSE 100 holds the 100 largest eligible companies by full market capitalisation, and the FTSE 250 holds the next 250. No company is in both at the same time, and companies move between them at the quarterly reviews.

Does the FTSE 100 only contain UK businesses?

No. Membership depends on the listing and nationality rules in FTSE Russell's Ground Rules, so where a company makes its money does not matter. Companies incorporated outside the UK can qualify if they meet extra conditions, and many members earn much of their revenue abroad.

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