Indices started off as baskets of stocks, carrying a single price, designed to make life easier for investors.

So for example the FTSE 100 index represents the market capitalisations of leading UK shares in one number. As such it is a useful way to get a snapshot of what is happening in the stock market and provides a useful performance benchmark for investors who hold portfolios of blue chip UK shares. It can also form the basis of derivatives contracts such as futures and options. With stock indices the name usually tells you who puts the index together (FTSE is short for Financial Times and London Stock Exchange) and the number of firms represented (about, although not always exactly, 100 in the case of the FTSE 100).