The London Stock Exchange Explained

The LSE, or London Stock Exchange, is the UK's share exchange, and it runs Monday through to Friday between the hours of 8am and 4.30pm.

No longer simply the preserve of people present in the exchange and the various wheeler dealer characters portrayed in classic TV shows, with the advent of electronic trades some years ago private investors are able to take part in the trading process, and even the auctions at the start and end of the day that set the opening and closing prices for the day.

On the London Stock Exchange itself there are many indices. That's the plural of index! The most famous of course is the one with the prestige shares, the FTSE, which is sub-divided. The FTSE 100 is the top companies, those that have the highest market capitalisation. Then come the FTSE 250.

There are various other indices too. As you move down to markets like AIM then there will be less activity, less market cap in the companies, less research done on them, they become to many inherently more risky, and it can be harder to trade in the shares of some of these companies: they can be less liquid.

From time to time the indices are shuffled. For instance there have been particular prominence around the time of the 'dot com' bubble to how lots of start-ups that been going for five minutes managed to kick out established companies that had been going for a hundred years on the strength of the incredible valuations that had been placed on them at the time. Mostly parity has now been restored, though some of those internet upstarts remain!

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