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Stock Trading UK

24.03.2021

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London stock exchange

One of the most famous and significant markets for securities and documents are located in the UK – the London Stock Exchange, perhaps the oldest of the financial institutions in Europe. The organization was founded in the 16th century by the king’s advisor, Thomas Gresh, but did not officially begin to operate until 1801. Almost half of the international stock trading is carried out in this institution, making the London – or Royal – Exchange truly international.

Where is the UK’s main exchange located?

During its existence, the London Stock Exchange has changed its address several times. The first exchange building, opened with the assistance of Thomas Gresham, was destroyed by the Great Fire, which destroyed half the city. After that, the British shareholders organized an auction on the first floor of the popular London coffee shop “Jonathan’s”, but the building also burned down. The last address where the exchange officially started working was Paternoster Row. Since the 15th century Paternoster Row has been considered the main book street in London, moreover, the famous St. Paul’s Cathedral is located not far from the Royal Exchange.

Major players

You can hardly find a stock exchange equal to the Royal one in terms of the turnover of shares in foreign companies. Among the firms and corporations whose shares are listed on the London Stock Exchange are such giants as mobile operators Vodafone, oil, and oil products Shell Transport and Trading, Finnish Nokia, German Siemens, Russian Lukoil, Rosneft, and many others. The London Stock Exchange is trusted for its stable and smooth operation. It is difficult to find at least one world-famous company, whose shares and valuable documents would not be listed in the database of the Royal Exchange.

Stock exchange incidents

There have been few incidents since the London Stock Exchange opened, but they did happen. The institution never stopped working, a historical example of the period of the Second World War serves as an example. During the shelling, a bomb hit the exchange building, but the traders did not stop working, but only went down one floor and continued to work in the basement of the destroyed premises.

But, no matter how hard the exchange employees tried, one day the work in its offices still stopped. In 2000, due to a failure in the electronic system, the work of the exchange stopped for as much as 8 hours. The incident entailed losses, which experts estimated at several million British pounds, but such a decrease did not even make one percent of the leading index of the FTSE 100 exchange. For comparison, in 1987, when this index fell by 30%, the market suffered billions of dollars in losses and the world economy was able to recover from such a crisis only in the 90s.

London Stock Exchange – London Stock Exchange

Formally, the history of the London Stock Exchange began in 1801, in fact – 230 years earlier. In 1571, financial advisor Thomas Gresham convinced the Queen of England to allow him to create a meeting place for businessmen selling sheep’s wool. Gresham did not bring innovation, because, at the beginning of the 16th century, there was already a stock exchange in Antwerp on Hofstraat Street – sailors and diamond cutters talked there.

Only representatives of the nobility and the court retinue were allowed to trade on the Royal Exchange, because of which the rootless merchants had to look for a place for themselves to meet. It, as in the case of NYSE EuroNext, became Jonathan’s Coffee House – where the first contracts for the supply of salt, matches, gunpowder, and tulip bulbs were concluded. Delayed delivery contracts became known as futures and options.

Thirty years later, in 1697, the English Parliament, for the sake of the nobility, limited the number of traders to a hundred and imposed huge fines for brokers without a license. The result was a massive exodus of small traders to the Exchange Alley and the formation of the Sweeting Alley Stock Exchange in 1773. Despite the opposition of the king, independent traders built their own exchange in 1801.

Several decades later, after the rise and fall of Napoleon Bonaparte’s empire, investors began to actively invest in the development of Latin America, and in the 1880s, after the appearance of the telegraph, the first ticker was introduced on the stock exchange. During World War I, the London Stock Exchange stopped from 1914 to 1915, but in general, quotations fell. With the outbreak of World War II, the site was closed from 01 to 07 September 1939.

In the post-war years, the London Stock Exchange increased its trading volumes, and in 1972 a new building of 2.1 thousand m2 was opened.

Recent mergers

Mergers and acquisitions carried out by the London Stock Exchange have a huge impact on quotes. In June 2007, a merger with the Italian Borsa Italiana SpA took place, as a result of which the London Exchange Group (LSEG) was formed, and the capitalization of the exchange reached 4 trillion. pounds – about 6 trillion. US dollars. At the same time, the Italian platform was bought by the MBE Holdings corporation.

In Italy, Borsa Italiana forms the Mercato dei Titoli di Stato (MTS), which has a positive impact on London, and in 2009 the “old world lions” acquire the Turquoise trading floor, established by nine investment banks. Despite the popularity of Turquoise (8% of all European trading goes through it), quotes are going down – the American crisis of 2008 and the general recession of the European economy are affecting.

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