The London Stock Exchange has two main markets in which companies trade. The Main Market includes the largest companies on the exchange. The FTSE 100 is compiled of the 100 most highly capitalized companies trading on the Main Market. The Alternative Investment Market (AIM) is the international market for smaller companies. As the London Stock Exchange is often used by companies to raise funds and increases their profile, the AIM often admits early-stage or venture capital-backed companies seeking to grow capital.
Throughout history there have been notable stock market crashes. Often induced by underlying economic factors, stock crashes are caused by a loss of investor confidence, which, in turn, can cause stock sell-offs. The result in significant stock sales in turn causes price drops which then can trigger mass sell-offs. Since the global financial crash of 2008, there have been several smaller crashes witnessed on the LSE. Due in large part to the economic downturn caused by the global coronavirus (COVID-19) pandemic, the FTSE 100 index suffered the second largest one-day crash on record, with the total market capital value of all companies trading across Europe’s largest exchanges falling significantly.