about shares

Slicker777

just two questions,

1) why are UK shares in pence and not in £ unlike in other countries? (Deutsch Borse in €, NYSE in $ and so on)

2) why cant we bid for shares instead of only being able to buy at the prices offered by the broker?

Thanks.

Deemy

just two questions,

1) why are UK shares in pence and not in £ unlike in other countries? (Deutsch Borse in €, NYSE in $ and so on)
They can be in £'s look at AstraZeneca, but most companies like to split there shares to keep then in the pennies. so to speak..

2) why cant we bid for shares instead of only being able to buy at the prices offered by the broker?
[/QUOTE]

The broker bids and offers on your behalf with the market maker. The price if you notice changes from minute to minute. You can if you like put LIMIT orders in that wait for a price to go to a more favourable level before the order is filled.

cheerfulcat

Slicker777 wrote:

just two questions,


2) why cant we bid for shares instead of only being able to buy at the prices offered by the broker?

Thanks.

You can, if your broker offers the facility. But you must be classified as an " Intermediate Customer " which means that you lose all* the protection a private investor has. An Intermediate Customer is expected to be experienced and to have a reasonable amount invested.

*Edit: should read "much of the protection"

Slicker777

thank you for your replies.

Probably as the shares are in pence this would also attract a lot of micro investors.

cheerfulcat wrote:

You can, if your broker offers the facility. But you must be classified as an " Intermediate Customer " which means that you lose all the protection a private investor has. An Intermediate Customer is expected to be experienced and to have a reasonable amount invested.

what kind of protection does a private investor have which an Intermediate Customer doesnt?

cheerfulcat

Hi, Slicker,

From the T&Cs - "As a consequence of categorisation as an Intermediate Customer certain protections that are afforded to private customers under the rules of the Financial Services Authority (FSA) will not apply to you. These include rules relating to the issuing of direct offer financial promotions; ensuring that customers understand the nature of the risks involved; the obligation to disclose charges, remuneration and commission in writing; restrictions on the ability to lend money or grant credit to private customers; notification of the circumstances in which a customer may be required to provide any margin requirements and ensuring that customers are able to obtain a reasonable price for non-exchange traded securities. Intermediate Customers do not have the automatic right to receive "best execution" in all markets, and their written consent is not required for certain custody arrangements. As an Intermediate Customer you will not have the right of access to the Financial Ombudsman Service, and we are obliged to warn you that we may have regard to your expertise when complying with regulatory requirements that communications must be clear, fair and not misleading." In other words, you're on your own, mate...

I *think* the reason that British shares are quoted in pence is purely traditional; the shares of bigger companies are mostly worth pounds rather than pennies, and it is not unusual to see a price of, say, 971 p. It is worth remembering, too, that British shares trade on a much lower P/E ratio than for example American ones.