The origins of trading – Onlinemarketshare review22 / June / 2020
The exchange is one of the few places on Earth where the money is made out of money, as Onlinemarketshare broker tells us. An exchange can be compared to a farm where you sow the capital and get the harvest of money. 80% of the capital and 20% of the world’s population stays in line for exchange products. Farms are thriving, even as the crisis continues across countries and continents. Exchanges are created by professionals and for professionals. It is a space of global distribution of risks and profitability.
Onlinemarketshare review says that the history of the Royal Exchange, the first securities market in London, began in 1566. One of the goals of creating the exchange was to build the competition to the Amsterdam trading center, which held the leading position for long period.
In 1698, a separate group - mainly brokers and speculators - were pushed out of the Royal Exchange. And then, the stock trading concentrated in London’s business district, on the street with a very appropriate name Change Alley, in two cafes: Garraway’s Coffee-House and Jonathan’s Coffee-House. The latter has become a historic site for the modern London Stock Exchange and all brokers like the Onlinemarketshare forex. Here a stock trader Jonathan Castaing prepared an exclusive newsletter every day, which contained data on the prices of shares in British companies. This newsletter went down in the London Stock Exchange history, because its release was the first documented proof of stock trading in London.
Soon, with general approval, a club of brokers was established in place of J. Castaing’s store in 1761. Eight years later, the number of club members raised significantly so in 1773 the club had to move into a separate building. It began to act under the name of “Stock Exchange”, introducing membership fees in 1801 and writing a code of rules later in 1812.
London began to acquire increasing exchange importance, taking leadership from such market centers as Paris and Amsterdam. The industrial revolution, and especially the development of the railway industry of the 1840-s, was a very successful period in the development of London and the UK country as a whole. At that time London became known as the most developed and significant trading center.
A Bubble of the Southern Seas
The British pound was considered one of the most reliable currencies for a long time, as the Onlinemarketshare broker review tells us. And 128 pounds at the beginning of the XVIII century were a great amount of money. That is the cost of one share of the South Seas Company, founded in 1711 by Duke Robert Harley, at the beginning of 1720. Its shareholders were promised huge profits from trade with the Spanish part of South America. The company promised the country to pay the public debt, which was necessary for England, participating in endless wars. Of course, the government did everything possible to ensure that the shares of this issuer were popular on the stock exchange. Brokers did not immediately understand that the value of the company was artificially created (only later, it turned out that members of parliament took bribes to approve the Royal act authorizing the activities of the South Seas Company). Shares rose in price throughout 1720; in accordance with onlinemarket-share.com reviews, they were bought by almost all residents of the United Kingdom, who had the necessary amount of money. The financial pyramid was growing, involving new and new shareholders in the South Seas Company — from lords to peasants. In June, its share was worth 1,050 pounds; the price was too high. The bubble has burst, and the value of securities fell to 124 pounds.
As a result, a number of English people suffered from the crisis. Onlinemarketshare broker writes that the well-known mathematician and physicist Isaac Newton did not escape that unpleasant fate. He lost about 20 thousand pounds on securities, stating that playing with stocks is much harder than discovering new physics laws. “I can calculate the trajectories of the motion of celestial bodies, but not the degree of the madness of the crowd,” said the great scientist.
Jonathan’s Coffee-House, still the main venue for stock trading in the City of London, following Onlinemarketshare review, burned out in a fire in 1748. Brokers purchased a new building on Threadneedle Street and planned the reorganization of their activities. In 1801 the owners began to let brokers enter the new exchange office for a specific entrance fee. When this financial institution had become officially known as the exchange, additional restrictions were introduced for those wishing to participate in stock trading.
The trading inside and outside the UK increased with the development of new technologies such as telephone and telegraph. As a result, London’s ongoing economic expansion of the 19th century made the city the capital of the international market. However, the two World Wars of the 20th century significantly reduced the world prestige and significance of the London market, while the markets of Wall Street and Tokyo were gaining momentum, laying the foundation for the future appearance of Onlinemarketshare forex.
LSE Information Service
On February 9, 1970, the exchange moved from the old building on Throgmorton Street to the 26-storied Exchange Tower, located west from the old exchange building. These innovations cost about $ 26.4 million, including the construction of a new low-rise building in an old place with a sales area of 23,350 square feet.
The introduction of automation accompanied the expansion of the premises of the exchange. In 1970, the Market Price Information Service began to operate: a 22-channel internal television system, transmitting data on the rates of approximately 700 different securities and activities of more than 200 brokerage and bank offices, which was very high-tech at that moment. An internal telephone communication system between exchange member firms was also put in place. It was the end for the old tradition when messengers rushed to look for a representative of an office in the hall after a call from his brokerage, and the representative, in turn, sent a “blue button” (messengers who had blue badges) to find out the quotation of papers of interest to the jobber who was directly involved in the retail sales.
Brokers and Jobbers
Onlinemarketshare broker review says that exchange members are divided into brokers and jobbers. Following existing rules, no one can act simultaneously in both qualities. Also, they cannot act as partners. It is not allowed to change one status to another, except with notification of at least one month in advance. A member of the exchange or his spouse cannot simultaneously be the head or employee of another enterprise.
Brokers deal with customers outside the exchange and fulfill their orders for the purchase and sale of securities through jobbers. The latter are very close to dealers in their functions. They operate in the market securities at their own expense and, unlike the specialists of the New York Stock Exchange, are not obliged to put customer interests or public interests first. Brokers receive a fee for their work in commissions, while the profit of jobbers is the difference between the purchase and sale price of securities. They were prohibited from dealing directly with customers, says onlinemarket-share.com reviews.
Business activity on the exchange is divided into various markets, each of which has a certain number of brokers and jobbers specializing in securities of a certain, fairly wide category or class. Each market has its place on the trading floor of the exchange. An Onlinemarketshare broker (or any other broker for that matter) however has a way to trade stocks with all those complicity. There are financial instruments named CFDs (contracts for difference) which allow trader to get profits directly from the price movements without any need to purchase or sell the stocks themselves. That’s the new financial instrument on a market which became most convenient with the digital age of trading when the market movements can be almost instant and the price can jump of fall in a matter of seconds.
Matter of technology
There are two sites on the London Stock Exchange where various securities are placed and traded. In accordance with the Onlinemarketshare review, only the most reliable companies, whose investment attractiveness is supported by financial reporting indicators, are allowed to enter the main market. And on the alternative investment market (AIM), companies with a capitalization of less than 500 million pounds can be placed. The exchange administration singled out this site, especially to honestly warn the investor that when he is investing in AIM, the risks of losing funds are relatively high. In a digital trading, however, you can access both categories with the same trading terminal and choose the CFDs which you find more promising at the moment.
By the way, the London Stock Exchange is very popular. Restrictions for foreign issuers here are much milder than in New York. Moreover, there is AIM, where most of the companies are located. Every year, global business is increasing its presence on the London Stock Exchange. Onlinemarketshare forex trading also has a large volume of CFDs for British companies and currency contracts for pairs with British pound.
Exchange as a business partner
A large number of different securities are registered on the LSE. The number of registrations indicates the vital role of the exchange and also the rising amount of trades on over-the-counter market which is still connected to the market situation during the trading hours. Occasionally, trading takes the form of options (seller and buyer). And most of the companies making ISO (initial stock offering) are looking for a way to enter London Exchange, or any other large international financial institute of this kind, the Onlinemarketshare scam analysts state.
The company may seek to gain access to the quotation of its securities on the exchange, pursuing one of the following objectives:
1. Submission. This procedure is not related to the issuance of new securities to finance the company but rather aims to strengthen the position of already circulating securities. Following the rules of the exchange, a company must publish a declaration containing complete information about the company itself, for its compliance with the terms of issuing securities for public sale. Only after that securities are allowed to be quoted on the exchange. As Onlinemarketshare review states, that form of access is suitable for most active public companies.
2. Accommodation. A company broker or its issuing house initially places a new security issue among a relatively limited circle of clients, usually institutional investors (legal entities), and only then he or she gets access to the stock quotation on the stock exchange. An appeal to a limited circle of investors follows the placement with an offer to purchase securities, and investors are provided with official printed information about the company, but not as comprehensive as the declaration upon presentation.
3. Public issue of new shares. For that, following the Companies Act, a full prospectus must be submitted and distributed in a form which is approved by the exchange. A bank serving a company usually has a brokerage firm that represents the company’s interests to the board of the exchange and draws up applications on its behalf - of course, in the form established by the council. Although the stock exchange itself bears no responsibility to investors or anyone else, the fact of admission to the stock quote is considered a sign of respectability. Shares cannot be issued at a price below par value (this is prohibited in the UK). Onlinemarketshare scam analysts, however, declare that there’s no guarantee that the stock price will go up after the initial public issue or that the company which issued the stocks is really worth investment.
On the London Stock Exchange, settlements are not made daily, but on the so-called settlement days. One of these days happens in the middle of the month, the second — at the end. All transactions concluded in the previous period must be completed on the next settlement day. As on the New York Stock Exchange, some transactions are executed on the spot (cash transactions) with immediate delivery. If the client does not intend to complete the transaction on the next billing day, his broker can arrange the transfer of payments to the next billing day. However, onlinemarket-share.com reviews say that all those requirements are not necessary for CFD contacts, which are much easier to perform because all the activity is strictly online and run through the specific software, allowing trader to access the exchange directly with no limits.