Helium was up, Feathers were down and Paper was stationery! (The FTSE100, the FTSE 250, Nasdaq, AIM... What are they?)

Member Name: Jazzy09

Product:	The FTSE100, the FTSE 250, Nasdaq, AIM... What are they?
Date:	25/09/09 (163 review reads)
Rating:

Advantages: Can make you a millionaire overnight.

Disadvantages: Can make you bankrupt overnight.

~ Overview ~

Well, where do I start on this subject? These acronyms sound like something you would hear at an IT conference from gadget geeks but no you would be more likely to hear it being spoken in the finance world. I have only recently understood what these actually do, just watch sky news enough and you will learn that green arrows are excellent and red arrows are grisly.

FTSE 100 Index

Well ill start by telling you how to pronounce it. Say "footsie" and your about there. The FTSE 100 was first introduced in January 1984 and includes an index of the top one hundred most capitalised companies in the United Kingdom which all float on the London Stock Exchange.

It opened at 1000 points and the highest point that it reached was 6950 points on the 30th December 1999 (coincidence that it was just before the millennium). It must have been all those poor companies making all those new purchases of chips.

As we are in recession, this FTSE is a good measurer of how well businesses are doing, so as I said before if the FTSE has a green arrow, it has had a good day and if it is red, not so good. It all depends on how many points are lost per day, during the latest recession it lost around 200 points per day. I hear you say that does seem much; well think again that could mean billions wiped of the value of businesses.

FTSE 250 Index

This index compromises of all the companies which aren't quite good enough to make it into the FTSE 100 index. Companies are evaluated every quarter and can be promoted or demoted depending on how they are doing.

There is a FTSE 350 but this is just made up of the FTSE 100 and FTSE 250 which equals 350. The current net value of this FTSE is around 161 billion, only 12% of the FTSE 100 (amazing numbers I know). The index for the FTSE 250 mostly consists of investment trusts (Public limited companies). If you were wondering the FTSE 100 is worth around £1,200 billion pounds (just enough to buy my wife's handbags!).

NASDAQ Stock Exchange

The full breakdown of the acronym stands for... (get ready) National Association of Securities Dealers Automated Quotations...phew. It is actually the American stock exchange and is the largest electronic screen trading market in the world. This holds around 3800 companies and trades more stock that anywhere on earth.

My nearest experience of trading would have been sharing my pogs or footy stickers in school, nothing on this type of scale.

There are similar indexes called NASDAQ Composite and NASDAQ-100 and NASDAQ Biotech which is very comparable to the UK versions. The currency used is also US Dollars.

The Trading schedule

The NASDAQ starts with an early session from 7am to 9:30am, which then leads to the normal trading round from 9:30am to 4pm and a later session from 4pm to 8pm

AIM

This stands for alternative investment market and is designed for those little companies which want to float on the stock exchange. This was setup in 1995 and has made £24 billion for more than two thousand companies. The best thing about this sub market is that it is more flexible and does not have to adhere to strict capitalist regulations e.g. number of shares allowed to sell.

Again there are three indices which fall under the AIM which are:-

~ FTSE AIM UK 50 Index
~ FTSE AIM 100 Index
~ FTSE AIM All-Share Index

Example of a company in the AIM - The number one company in the AIM is Lancashire Holdings worth an estimated 883 million. The currency used in the AIM is GBP. What does GBP stand for I hear you ask?

Here is how it is broken down:-

GGP- Guernsey Pound
JEP Jersey pound
IMP Isle of Man pound
GB - Great Britain and Northern Ireland

So when it all comes together it's called GBP.

~ My opinion ~

In my opinion, these types of markets are used to show off who is rich and powerful and who is at the bottom of the ladder. Every now and then you get a golden nugget company like Yahoo or Microsoft which makes massive leaps fairly quickly but for many small companies it's a long hard slog to make it even into the FTSE 250 but still something to be proud of when you make it.

Like most things in life, it's a gamble, but one worth taking especially if you need some extra cash to inject into your business, which one day may end up being a success worldwide, which is any business owners dream.

I personally believe that floating your company on the stock market is sometimes a big gamble and companies can disappear overnight, but then again some can make millionaires too. If you have got to here without falling asleep you have done well!

My verdict: Markets designed to be manipulated whenever it is needed.

Here are some funny puns which would make the newspapers if any of the following companies/markets went bust:-

1_ Coca Cola: Coca Cola fizzled!

2 - The market for raisins dried up!

3 - Fluorescent tubing was dimmed in light trading. Knives were up sharply!

4 - Batteries exploded in an attempt to recharge the market!

5 - Balloon prices were inflated!

Summary: The big money markets and how they work.