Fundamentals of stocks trading in London
Stock exchanges are used for buying and selling shares of companies. The London Stock Exchange has been located in Paternoster Square, near St Paul’s Cathedral in Central London, since 2004 after moving from previous sites on Threadneedle Street.
The FTSE 100 consists of the 100 largest companies listed on the London Stock Exchange, for example, Shell Transport & Trading Company, HSBC Holdings or Vodafone Group.
The most significant market capitalization companies currently trading on the London Stock Exchange based on share price/share count to performance ratio are listed here.
In London, the London Stock Exchange is the world’s largest stock exchange by market capitalization of its listed companies at US$4.089 trillion as of January 3, 2014.
London is considered one of the three financial centres alongside New York City and Tokyo for providing global liquidity for investors in financial markets, specifically equities.
London has over 480 listed companies, including FTSE 100 Index and FTSE 250 Index representing industries from Britain.
London Stock Exchange is governed under UK legislation while also subject to regulation by several international governing bodies, including Securities & Futures Authority (SFA), International Financial Services London (IFSL) overseeing offshore qualified institutions and European public limited company (PLC) regulations under Directive 2004/25/EC.
London Stock Exchange operates on the principle of price-time priority, where orders received from market participants are matched against each other on a price and time priority basis.
London Stock Exchange observes regular trading sessions from 08:00 to 16:30 London time with pre and post-trade timings between 09:15 and 17:30 London time.
London Stock Exchange is one of the main international centres for innovative venture capital financing.
During 2007, £11.4 billion was raised through private equity transactions in London, more than double the amount seen on NYSE Euronext during that year (£5bn)and London Stock Exchange’s highest ever volume of lending; the second-highest being in 2006 (£9.4bn).
London Stock Exchange has partnered with ten leading venture capital firms based in London to launch the London Stock Exchange Entrepreneurs-in-Residence (EIR) program.
London Stock Exchange EIRs support and mentor startups for additional funding, consolidation or exit strategy.
The London trading platform offers several advantages that outshine the disadvantages of London trading.
The London stock exchange has high liquidity compared to any other European city and thus provides better prices for various securities.
London Stock Exchange offers a great range of cash settlements, settlement services, risk management tools etc.
London stock exchanges have meagre transaction costs compared to New York or Tokyo stock exchanges.
The London stock exchange also has a relatively large number of listed companies, which help the investors trade in various stocks from different sectors on the London Stock Exchange platform at lower transaction costs than other international markets like New York or Tokyo.
London Stock Exchange is a more automated market with faster execution times and a more efficient order matching system than other global markets like New York or Japan, making London one of the most competitive international capital markets.
London Stock Exchange also has the most significant investment community in London, which provides a large pool of investors for various companies to raise funds.
The London stock exchange has limited regulatory authority over its members, leading to less stringent regulation than other markets like New York or Tokyo.
There is no legal distinction between a market maker and broker-dealers which causes conflicts of interest in executing client orders.
London Stock Exchange operates on the principle of price-time priority. Meaning order execution depends upon the price and time of order entry rather than on the urgency or value of the request.
The London Stock Exchange does not have information about its customers. London Stock Exchange has non-standardized products, which makes trading in the London stock exchange difficult for new traders compared to other international markets like New York or Tokyo.
The London stock exchange is the most developed capital market with a very high physical presence.
However, the London Stock Exchange infrastructure cannot meet the needs of modern traders and investors due to the lack of technology upgrades in the London Stock Exchanges infrastructure.
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