What is the London Stock Exchange?

The London Stock Exchange (LSE) is a platform on which people can trade shares and other equities.

With thousands of companies from over 60 countries listed, it is one of the world’s largest stock exchanges. It is also one of the oldest, having been founded in 1773.

What is a stock exchange?

A stock exchange allows you to quickly find buyers or sellers for your shares and trade at the best possible price.

When traders want to buy or sell, they will alert the stock exchange (usually via a stockbroker) and it will find someone to complete the deal with. Provided there’s at least one willing buyer or seller, this transaction can take place instantly.

You don’t have to trade shares using a stock exchange. If you prefer, you can manually sign your shares over to someone, but that’s certainly a lot more complicated than using an exchange.

Companies have to meet specific regulations in order to be listed on a stock exchange and remain there. These regard the structure of the company, the initial stock price, number of shares, number of shareholders, total market value, etc. This varies depending on the stock exchange.

Learn how to invest in LSE

How does the London Stock Exchange differ from others?

The exchange is based in London, although it hosts companies from all over the world.

As it’s one of the world’s largest exchanges, you’re more likely to find the company you want to invest in, with a high liquidity of buyers and sellers. The higher the liquidity, the easier it is to quickly exchange for a fair price.

In order to be listed on the London Stock Exchange Main Market, a company must have been trading for at least three years and have a market value of at least £700,000. At least 25% of its shares must be held by the public.

What is the FTSE 100?

The FTSE 100 is an index of the top 100 most valuable companies on the London Stock Exchange.

It is possible to invest money in tracker funds which mirror the value of all FTSE 100 companies. The value of the FTSE 100 index is one of the most commonly used indicators of the strength of the global economy.

Get more detailed information about FTSE 100

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