The heart of investing in the UK is of course the famous London Stock Exchange (LSE), with roots going back all the way to 16th century England. The modern version of the exchange was established in 1801, when the Subscription room was established – a trading room for paying members only.
Most securities listed on the LSE are quoted in Sterling, but some securities are in Euro or United States dollars instead.
In February 2021, the LSE had a market capitalisation of £39 billion.
The London Stock Exchange is owned and operated by the London Stock Exchange Group (LSEG). This group was formed in 2007, as the London Stock Exchange merged with the Milan Stock Exchange (Borsa Italiana).
Examples of securities traded on the London Stock Exchange
If you want to invest in the UK, assets and instruments listed on the London Stock Exchange is a good place to start. There are many online brokers that include LSE-listed assets and instruments in their offering, making these investments within reach for ordinary consumers.
Examples of security types listed on the London Stock Exchange:
- Common stock
- Bonds, including gilt-edged securities
- Exchange-traded commodities
- Exchange-traded funds (ETFs)
- Covered warrants
- Debt securities
- Derivatives
- Global Depositary Receipts (GDRs)
- Structured products
Where is the exchange building?
Since 2004, the London Stock Exchange have been located in a building at 10 Paternoster Square in central London, near St. Paul´s Cathedral.
The London Stock Exchange does not have a traditional trading floor, since the system of open outcry has been replaced with electronic trading. Unlike the previous London Stock Exchange building, the building on Paternoster Square is not open to the public and there is no viewing gallery. Trading hours
For the LSE main order book (SETS), trading takes place Monday – Friday from 08:00 to 16:30 local time. The exchange is closed during certain holidays (see below).
Schedule
Trade reporting 07:15–07:50
Opening auction 07:50–08:00
Continuous trading 08:00–16:30
Closing auction 16:30–16:35
Order maintenance 16:35–17:00
Trade reporting only 17:00–17:15
Holidays
The exchange is closed during certain holidays, which is announced well in advance by the exchange. At the time of writing, the announced holidays are New Year’s Day, Good Friday, Easter Monday, May Bank Holiday, Spring Bank Holiday, Summer Bank Holiday, Christmas Day, and Boxing Day. If New Year’s Day, Christmas Day, and/or Boxing Day is on a weekend, the following work day is a holiday.
Important: Always check directly with the LSE for current information about trading days and trading sessions before you make any decision.
MM & AIM
The Main Market and the Alternative Investment Market (AIM) are two different markets on the London Stock Exchange.
Over 1,300 companies are listed on the Main Market, from roughly 60 different countries.
AIM is a market for smaller companies that do not live up to the strict requirements of the LSE Main Market. The rules and demands of the AIM are much easier to adhere to. Investing in companies listed on AIM is considered more risky than investing in LSE Main Market-listed companies. AIM is especially popular among investors who have the resources to do their own investigations and evaluations of companies.
Major indices for the LSE
FTSE 100 Index
FTSE 250 Index
FTSE 350 Index
FTSE SmallCap Index
FTSE All-Share Index
The Millennium Exchange trading platform
The trading platform used for the London Stock Exchange is the Linux-based Millennium Exchange. This is a proprietary trading platform.
Prior to Millennium, LSE used the Windows-based TradElect trading platform. The change from TradElect was announced in 2009 and the migration of the Main Market finished in 2011.
The London Stock Exchange´s Order Book
The London Stock Exchange´s Order Book attracts the largest trading volumes for a majority of UK stocks. To access the order book, an investor needs to have an account with a broker offering Direct Market Access.
What´s the order book?
The LSE Order Book is simply a listing of willing buyers and willing sellers. The investors willing to buy (at a specific price) is in one column and the investors willing to sell (at a specific price) are in another. The buy and sell columns are arranged on a price/time priority basis, where the highest price that anyone is willing to pay is placed at the top of the buy column and the lowest price that anyone is willing to sell for is placed at the top of the sell column.