Trading FTSE MIB
The FTSE MIB is the standard stock market Index for the Italian national stock exchange, known as the Borsa Italiana. The Index represents the 40 most traded stocks on the exchange made up of the leading companies across the ICB (Industry Classification Benchmark) sectors in Italy.
The Index has been established from the stocks which are being traded on the Borsa Italiana (BIt) main equity market.
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A Brief FTSE MIB History
Eugène de Beauharnais established the Milan Stock Exchange (Borsa di Commercio) in January 1808. It was publicly owned until 1998 when it became privatized. In October 2007, there was a takeover and it merged with the London Stock Exchange, becoming the London Stock Exchange Group. In 2016 the LSEG announced that it would merge in a deal with Deutsche Borse.
Until 2004, the Italian stock market was based on the performance of the MIB 30 the top 30 companies on the Milan stock exchange. It later became the S&P/MIB, which composed of the top 40 stocks from the Borsa Italiana, and as of 2009, it has been known as the FTSE MIB.
Over the past 10 years, the FTSE MIB has seen a lot of movement. From 2005 to 2007, the index was rising to a high of 43,755. Shortly after there were some up and down trends following various world events, today the FTSE MIB is above 23,870.
The base value of the FTSE MIB Index was set at the level of the MIB 30 Index at the close of trading on October 31, 2003 at 10644 points. Historically, the Italy Stock Market (FTSE MIB) reached an all-time high of 50108.56 in March of 2000 and a record low of 12362.50 in July of 2012.
Free-float methodology is a term used in stocks trading, and measures the number of shares that are available in the market for the general public to buy and sell. In comparison, full market capitalization calculates all of the outstanding shares that are available.
This can change daily since each stocks price fluctuates on a regular basis. Free float market capitalization only considers the shares of the company that are offered on the trading market. This methodology is used for calculating most of the European stock market indices, including DAX 30.
The 40 companies listed on the Borsa Italiana are chosen from different industries to make a well-rounded mix of the Italian market. For example, Pirelli who make tires, Tenaris who is in the iron and steel business, Enel which is Green Power, and several Banks.
The Index is taken from the stocks trading on the Borsa Italiana (BIt) MTA and MIV markets. The Price Index and Total Return index are calculated in real time in Euros.
|ENI: An Italian oil and gas company||Current market capitalization is $ $48.204.561.054|
|Enel: Is an Italian multinational oil and gas company in Rome||Current market capitalization is $39.887.952.100|
|Intesa Sanpaolo: Is an Italian Banking Group||Current market capitalization is $38.205.718.059|
|Luxottica: An Italian eyewear company||Current market capitalization is $23.604.913.158|
|Atlantia: An Italian holding company with the primary asset being the Italian autostrade network.||Current market capitalization is $20.162.259.321|
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Factors That Influence the Overall Index Price
The two main factors that affect share prices are the performance of the companies that has issued the shares and the environment.
When geopolitical conditions such as climate, regional stability and natural resource conditions are calm, we tend to see increases in the value of the FTSE MIB 40. However, when the tensions surrounding these issues are at a high, we tend to see downward trends.
The FTSE MIB (FTSE Italia) like all other stock market indexes is dependent on the performance of its companies. When they do well, the index overall does well.
Some world events can influence the index, these include Government elections, ECB interest rates updates, new trade agreements, and the price of oil also influences world markets.
If you are looking to trade on Italian stocks the easiest way is through a broad market index. The FTSE MIB overall, can be an attractive asset to trade on. There are various reasons that traders flock towards this index, a few of the main reasons are:
- High Liquidity
- Total Transparency
- Price dynamics are relatively predictable outside of crisis situations
- Ease of access to information regarding the main price index movers.
- Large amounts of news coverage
FTSE MIB Trading information
- FTSE MIB MT4 Symbol: FTSEMIB40
- MIB 40 Trading Time: Monday – Friday 08:00 – 16:39
- Issuing Country: Italy
- Index Currency: EUR
- MIB 40 Minimum Trade Size: 0.10
- MIB 40 Price Increment: 5.00
- Exchange: Borsa Italiana (Italian Derivatives Exchange)
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FTSE MiB main FAQs
Is the FTSE MiB worth trading?
The Italian FTSE MiB index is a volatile index that frequently sees large moves and double-digit annual changes. This great volatility and a tendency to trend strongly makes the FTSE MiB an excellent choice for traders who wish to focus on the European equity markets. The index also includes powerful multi-national companies such as Fiat Chrysler, ENI Group, and STMicroelectronics, as well as domestic Italian companies, making it a good proxy for the overall Italian economy. Those who have a good understanding of the intricacies of the European Union should be able to make well informed trades that could potentially deliver strong profits from this index.
Who owns the FTSE MiB index?
The FTSE MiB-40 was created in September 2004, superseding the MiB-30. At the time the index was overseen by the Standard & Poor’s Group, however in June 2009 it was taken over by the FTSE Group, which is also 100% owned by the Italian Borsa Italiana’s parent company the London Stock Exchange Group. Prior to the transfer the index was known as the S&P/MiB. Like many other smaller global indices, the FTSE MiB has a heavy weighting in the financial services and banking industry.
What is the best way to trade the FTSE MiB?
While it is possible to trade the FTSE MiB through ETFs, that isn’t the most effective way to gain exposure to this European powerhouse of an index. Instead it is better to focus on CFDs, which make it possible to go long or short the market with equal ease. When using CFDs there is no actual purchase of the underlying index or its component stocks. Instead the trader is speculating purely on the price change in the index. Another benefit of using CFDs to trade the FTSE MiB is the leverage offered when trading CFDs, which can help magnify profits when traders have a winning trade.
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