Stock Markets
When a previously private company decides to go public and become listed, they will be added to what is known as a stock market. A stock market is the physical or theoretical location where stocks can be traded. Not all stock markets share the same characteristics and listing criteria, in fact many specialize in particular sectors (information technology, science, and so forth) and many more have very strict conditions for companies wanting to gain entry into the market.
London Stock Exchange
In the United Kingdom the main place for stock trading is the London Stock Exchange, known also by its abbreviated name of LSE. The Exchange was opened in 1801 and at present has four main divisions, each specializing in different forms of investment trading or types of listed companies. The equity market is the main area of interest to share-market investors, as it is the sector which encapsulates the Main Market (where the large and highly valuable companies are listed), the Alternative Investment Market (sometimes known as the AIM, home to newly listed companies and those with low share values, often known as penny share companies), the Professional Securities Market (or PSM) and the Specialist Fund Market (SFM).
LSE Main Market
The London Stock Exchange's Main Market is notoriously difficult for companies to be listed on as it has high standards and complicated listing criteria. Not only must a company applying for listing have at least three years of audited accounts (therefore ruling out all new companies), but it must also have a minimum public float of 25%, a minimum market capitalisation of £700k, free transferability of securities, and a company prospectus that has been approved by the United Kingdom Listing Authority (UKLA).
LSE Alternative Investment Market
These factors prevent many young or low-capital companies from making it into the Main Market, which is why the Alternative Investment Market (AIM) was opened in the mid-1990s. The AIM has easier admission criteria - it does not require companies to have a minimum market capitalization, nor does it require companies to have issued a minimum number of shares. Investors interested in penny-share companies or companies which specialize in a particular product or service often focus their attention solely on the AIM
Market Trends
All stock markets are said to experience market trends, that is fluctuations in value that may be attributed to outside influences. Trends are described as being either primary, secondary (or short term), or secular (long term). When a market is experiencing downward movement and a lack in investor interest it is described as being a bear market; if the market is instead growing and investors are optimistic it is known as a bull market. Markets can experience primary bull market conditions during a long term bear market (in other words, short term optimism in what is otherwise a declining market), and this is often described as a bear market rally. Conversely, markets experiencing long term bull market conditions may have a short term decline, known as a correction.
When stock markets go through periods of unusually high growth or worryingly steep decline the period will be given a description (a 'crash', 'bubble', 'recession,' 'boom' and so forth). Recent such events include the 1995-2001 Dot Com Bubble which burst spectacularly in 2001-2002 (the 'Dot Com Crash').