What are FTSE futures?

Financial Times Stock Exchange (FTSE) futures are future contracts for FTSE indices. Future contracts are a form of derivative contracts in which participants agree to buy an asset on a future date at a specified price. Future contracts are barometers of price expectations. 

The FTSE, also known as the FTSE Russell Group, is a UK-based financial firm established in 2015 that produces, maintains, licenses, and markets stock market indices. The FTSE Russell Group is owned by the London Stock Exchange Group (LSE).

FTSE futures are used by banks, brokers, specialist traders and market makers to manage risk on the UK equity market. This is carried out by locking in a price ahead of the time, lowering the effect of market gyrations.

Types of FTSE futures explained

There are different types of FTSE futures, as the group offers various indices. Some of them are listed below. Note that there are many more FTSE futures examples based on the underlying indices. 

• FTSE 100 futures

FTSE 100 futures are based on the FTSE 100 (UK100) Index, a weighted basket of the 100 largest firms traded on the London Stock Exchange. The index tracks the performance of the UK equity market via a diverse variety of stocks. 

• FTSE 250 futures

FTSE 250 futures are based on the FTSE 250, a weighted index of the 250 biggest stocks on the LSE. The companies listed on the index can be classified as medium-capitalisation stocks.

• FTSE MIB futures

FTSE MIB futures are based on the underlying FTSE MIB Index, which measures the performance of 40 companies listed on Borsa Italiana, the Italian Stock Exchange in Milan. The index aims to track the performance of broad sector weights of the Italian stock market. 

The index was initially administered by Standard and Poor's. In 2009, this responsibility was passed to the FTSE Group.

What are the trading hours of FTSE futures?

FTSE futures are traded between 8am to 9pm (UTC). However, it must be noted that beyond these hours, FTSE futures contracts are priced on the basis of estimates from Dow futures movements and other stock indices around the world.