Where are Penny Shares Traded?
Penny shares in the UK may be traded on one of a number of markets or trading facilities.
The most favorable place for penny shares to be listed is on the Alternative Investment Market (AIM). This is a market which opened in 1995 specifically to give smaller, younger companies access to the public markets and helps to increase their profile and credibility as well as making it eligible for a number of tax benefits.
Some companies may be listed on the London Stock Exchange's (LSE) Main Market - what most people would identify as 'the UK stock market'. The main market differs from AIM in that the company would need a minimum market capitalisation as well as having a minimum of 25% of its shares in the public domain. The LSE will also only admit companies with a 3 year historical trading history. By comparison AIM does not have such stringent stipulations and is more lightly regulated. The main market is where you will find many of the recovery shares mentioned previously.
Under the umbrella of the main market are a number of individual groupings for special sectors such as techMARK™ - the market for cutting edge technology companies. There are also a number of indices which can be used to track the performance of the market, such as the FTSE™ AllShare, which covers all the shares on the market, and the FTSE™ 100, which covers the top 100 companies.
A further market where Penny Shares may be traded is on the Off Exchange (OFEX). This is an independent market which concentrates on small and medium enterprises and will also include many companies from outside the UK and around the world. OFEX is not a regulated market and companies on it are officially 'unlisted', however many see it as a springboard for listing on the Main Market or AIM.
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