Can anyone out there give me any information about the LSE. At the firm I work for, we are able to trade it now. I know its something like trading the CME, but thats about it. I just want to know if its going to be worth my while to be in at work for 3am in order to trade it, or should I just stick to trading to North American markets. Thanks
The LSE is one of the biggest markets outside of the NYSE and NASDAQ and specialises in UK equities. It is an electronically traded order driven market but also has an extra quote driven side to it called the SEAQ. Normally this is only used by institutional players and generally only for block trades or trades which are special in some way. As to whether or not it is worth trading - my guess would be probably not if you have to ask the question. In general the market is about as efficient as the main USA markets so you are not likely to see many or maybe even any extra opportunities that you don't already have in the USA. In addition you have FX risk and other issues.
AlienChild, Thanks so much for your input. I am in Hong Kong and thinking seriously about starting day trading. For Hong Kong Stock Market, we don't have that low commission fee as in the US market. But to trade the US stocks, we need to work at 9:00 pm to 4:00 am local time. LSE will be good as i can work from 3:00 pm - 10:00 pm local time. So AlienChild, to your knowledge, any disadvantages of LSE over the US market mainly NYSE and NASDAQ for a biginner as I? I would apply a remote trading account from a US brokerage firm which can provide feasible commission fees.
LSE would be as good to trade as the USA markets in terms of market behaviour, patterns, opportunities and general functionality. Assuming commission costs are about the same: Main advantage of LSE is time zone as you have already pointed out. Main disadvantage of LSE is far less information available. Almost all books, help and information out there is aimed at the USA markets. Having said that you can pretty much apply the concepts directly to the LSE in many cases. My opinion - as a beginner, if you are able to manage the trading hours of the USA that would be better. Basing my opinion purely on the amount of information out there on the USA markets. The functionality of the LSE and NYSE and NASDAQ is otherwise very similar.
There is a 0.5% tax on every purchase on the LSE. To get around this you can trade cfd's but then you have counterparty risk.