ftse ?

[tali122]

on the news it will say the FTSE is up ,say, 50 points to 5713 - what are those 50 points?- do they represent money -millions?

and the figure such as 5713 -does that mean 5713 million or billion or is some other calculation/methodology used- if so what?

THX

[Loosehead]

The index covers the 100 top companies, when it first started it was an arbitrary 1000, the 100 top companies then proportioned that 1000 according to their numbers of shares and share prices. They where all different sizes so arithmetically to comprise the figure they had to divide the total in a weighted fashion so that their shares where asssigned an individual value that added up to 1000. That value in turn is correlelated to the price so originally is was 1:1 as the relative prices of the shares changes the factor would move with it giving a new price, add up those new prices and you have the new value of the "index". The figure 5713 in this case is the value of the index based from the original start point, it does not represent an amount in terms of currency or indeed ordinal number. To answer your first question generally when the value of the index changes the financial press can say how much value it represents because they use the original calculation to derive it.