OFEX ?!?!?!? How to buy shares

Pricy147

I have been tinkering in shares recently - purchasing on the FTSE 100 and Dow Jones - however, I noticed a share listed for smaller UK companies - namely OFEX.

The OFEX web site can be got at from the following link:

http://www.ofex.com

My favourite football team trade on this marker - Arsenal Holdings PLC. Has anyone got experience of purchasing shares on this exchange? If so - how did you go about it, what are the fee's?

My thinking is that although these companies are going to be higher risk for investment - this is where the real potential is going to be - possiblilites of making big bucks if you catch the right companies.

cheerfulcat

Hi,

AFAIK, most brokers will deal with OFEX shares ( certainly comdirect do ). The brokers don't charge extra but there is a wider spread - do you know the price of Arsenal shares, btw? £4000 to sell, £3800 to buy. That's per share...

Cheerfulcat

etybagem

Pricy147: OFEX is not an exchange like the London Stock Exchange. It is an investment firm (I.e. a broker) authorised by the Financial Services Authority - see http://www.fsa.gov.uk/register/. Exchanges have stronger obligations to ensure proper markets and to protect investors.
I don't think that companies traded on OFEX have to disclose as much information on their circumstances as those admitted to listing on the Stock Exchange so you might be less certain of what is happening to them. There could be less reporting on them in the newspapers.
You might find that a lot of the shares are held tightly by a few people - maybe the owners of the companies - so there will be less around to buy and sell, irrespective of how many shares the companies have issued. That affects liquidity - the ease with which you can buy and sell shares - and the spreads between the buying and selling prices could be quite wide, as cheerfulcat mentioned. Hence, you might need a 15-20% movement in price before you begin to make a profit (after costs and commissions).
OFEX shares are probably less actively traded. You need to be aware that when there is good news there could be lots of interested buyers but not many sellers, and when news is bad everyone will want to sell but there might be little buying interest - this could cause price 'gapping' and quick movements of prices, with those 'in the know' getting in first.
Bearing in mind the above, speak to your brokers as they should be able to advise you if an OFEX share is a good investment, although they will be unable to guarantee how shares or a company will perform.

Pricy147

sounds interesting....have any of you guys traded on OFEX and had any luck? If you could guess an emrging market/technology - should be some good money to make if your willing to take the risk!

zcaprd7

I'd stay clear for a while, the future of the ofex exchange is rather up in the air at the moment...