London Stock Exchange is the oldest of the existing Europe.In addition, it is famous for its internationality: according to 2004, it included 340 companies from 60 countries.Despite the fact that in the UK there are 21 more Exchange, the most popular still remains London.On it we will tell you in this article.
structure
London Stock Exchange consists of three main markets: the official, unregistered securities and alternative investments.
- official market.The largest segment is designed for companies with a certain history and the existence of substantial capital.It has two divisions: for international and domestic companies.
- market unregistered securities.It appeared in 1980 to provide services to small firms.Unfortunately, the experiment was a failure, and because of the low liquidity in the early 90s the market canceled.
- Alternative Investment Market.It arose in mid-1995 to serve small businesses.Among the new candidates are not subject to special requirements in terms of minimum history of the company and the number of already put into circulation shares.There have also been reduced to the required minimum requirements for capital.But liberalization in 1997 has led to the fact that the London Stock Exchange tightened rules for the placement of shares.
history
Since the beginning of the 16th century trades in securities carried out in coffee shops or on the streets.In 1566 he came from Holland Thomas Gresham offered to build for this purpose a separate room.He said he would do it at their own expense, but demanded that the local people and the government to find a suitable area.On the collected amount of money in the size of 3,500 pounds was acquired the right piece of land.In 1570, the opening of the Royal Exchange.
New Exchange
Unfortunately, the Great Fire of London destroyed it, and the new building was rebuilt only in 1669.Gallery also organized, consisting of 200 seats for rent.In the basement of the building brought back stored goods.In 1698, brokers were expelled from the building exchange for lewd conduct (molestation and noise).For the negotiation and conclusion of transactions was selected coffeehouse "Jonathan."Then there were the first price lists of securities.After 50 years, the coffee shop "Jonathan" to repeat the fate of the first stock exchange - it burned down.However, the visitors restored their own building.In 1773, not far from the coffee brokers have built a new building, dubbed it "New Jonathan" (later the name was changed to "Stock Exchange").
Exchange in the 20th century
First World War greatly undermined the European stock markets.The London Stock Exchange is closed, and the latest in a year (in 1915) resumed its work.For security battalion was formed from volunteers shooters.In total, there were 400 people.Every fourth died on the battlefields.By the 60 th year of operations and the number of personnel has increased so much that the leadership of the stock exchange it was decided to build a new 26-storey building.The construction lasted 12 years, and in 1972 opened a new facility the Queen of England.
In 1987, on the stock exchange underwent major transformation.The most significant of these are: the translation of physical trading in electronic (system SEAQ), the abolition of the minimum border commission, the members of the Exchange permission to combine the functions of broker and dealer.Thanks to the electronic system SEAQ brokers did not have to go to the gym for sale.They could do this in his office.
the end of 1997 quotes the London Stock Exchange have completely switched to electronic format.Computer SETS trading system has increased the speed of transactions and performance in general.
LSE nonferrous metals
was founded during the Industrial Revolution in 1877.Now the London Stock Exchange non-ferrous metals is considered the most important European trading center.She has come a long way from the simplest to the forward (and then and futures) transactions.All this allows consumers and producers of industrial metals to extinguish losses and hedge the risks of price hikes.You can make transactions on options, futures contracts and cash items.
Exchange is located in a historic building Planteyshn House and still retains many of the traditions of the past.The operating room is made in the shape of a circle that defines the "circular membership" of traders.Despite the emergence of electronic systems, the transaction is still enclosed by shouting.Similarly, the voices and metal prices.London Stock Exchange on Planteyshn House has a special "sign language", which brokers use during rush not to mix to give and receive orders.
gold market
There are also a precious metal, which trades the London Stock Exchange, - gold.It has always stood in this place alone.To carry out trades in a separate room together representatives of five companies.Leading chairman bids, and "Five" is willing to conclude transactions.After all approvals and approvals announced fixed price, which will be concluded and the contract.By a similar scheme is bought and sold copper.London Metal Exchange, is certainly one of the most famous British financial institutions.But there are three other institutions are worth mentioning separately.
London Stock Exchange oil
Before 1970, the energy market has been quite stable.But as a result of the oil embargo (1973-1974 gg.), The formation of OPEC and the Arab-Israeli War, oil producers have lost control over prices.Therefore, in the early 80s.London was founded by the International Petroleum Exchange.The main reason for its appearance - the increased volatility in oil prices.A non-standard location explains the increase in the volume of oil production in the North Sea.
Exchange offers both options on unleaded petrol, gas oil, crude oil, and futures contracts.Its main feature - the ability to exchange cash market positions in the futures position, provided that this exchange takes place in the non-business hours.The second feature - a long-time (20:15).This schedule allows brokers to enter into arbitration agreements with the United States.
British options and futures market
Initially, it had a very different title: The London Mercantile Exchange.This institution is a market commodity derivatives and agricultural products of the United Kingdom.Of course, in terms of volume and size is significantly inferior to their foreign counterparts (eg, the Chicago Stock Exchange), but it does not prevent to carry out a significant proportion of transactions in Europe.
This Exchange appeared in the mid-20th century on the basis of "terminal associations", which was conducted futures transactions across multiple product lines.Later, she has incorporated nearly all of the local markets, and even took market share from the Baltic colleagues (derivatives on the ship's freight and potatoes).Prices on the London Stock Exchange Options and Futures quite profitable.You can enter into transactions both in conventional (barley, wheat, pork, etc.) And on colonial commodities (soybeans, sugar, coffee).
International Exchange Options and Futures
In Britain, there is a separate market options, but it works mainly with Sweden.Transactions on a wide range of assets held in the International Exchange for options and futures.
Prior to 1992, data transactions involved in the operating room of the London Stock Exchange.Then it was moved to the building on Cannon Street.Most of the products of this exchange associated with the bonds and credit instruments, as regards certain of the transactions of futures contracts on equities.
on international exchanges actively traded British stock index FTSE 100. Its important feature is the ability to work with both European and American options.Until recently, she had the status of the best exchanges in Europe in terms of technical equipment.
International Exchange Options and Futures is a central market in Britain for derivative instruments and provides a high level of liquidity for the bonds in Japan, USA, Germany and Italy.But, unlike the US institutions, it does not deal with contracts for foreign currency derivatives.
Once exchanges began with informal meetings in prison transactions.Now they have become formalized financial institutions, offering customers a wide range of services.As the settlement system appeared rigid and strict rules, minimizes the risk of the participants.
Most British exchanges still do not generate substantial profits.Their liability is limited to the usual guarantees (sometimes in the form of securities).Cleaning operations of these institutions engaged in London clearinghouse.It was she who provides the guarantee of insurance fund.At the end of 2000, its size was 150 million pounds.
Conclusion
Now The London Stock Exchange is among the five largest institutions of its kind in the world.There's shares traded 300 companies from 60 countries.If we consider the Russian companies, the greatest demand is for the paper of "Lukoil", "Gazprom" and "Rosneft".Since 2005, the exchange started trading options and futures on the RTS index.
