Shares on the London Stock Exchange (LSE) are listed in pence, so to get a share price in pounds you need to divide it by 100. This can be a little confusing if you compare UK shares to American stocks which are listed in dollars. So, here I’ll explain how to work out the price of a UK share in pounds from pence.
Converting share prices from pence to pounds
So for example, if Lloyds shares are trading at 50 (50p) then by dividing it by 100 you get £0.50.
Or to take an example of a higher-priced stock like Flutter which currently has the most expensive shares in the FTSE 100 at 13,175.
As you can see from Flutter’s share price chart, they have performed very well recently and are up nearly 765% since they IPO’d in 2010 at 1,500p (£15.00) and are now trading at 13,175p (£131.75)
So if you want to buy a single share in Flutter it will now cost you £132 pounds which is 13,175p divided by 100 (because you have to round up and buy whole shares).
But, if you only have a small portfolio, you do have the option of buying slices shares in companies with brokers that offer fractional shares.
Why pence instead of pounds on the London Stock Exchange?
Shares are traded in pence on the LSE instead of pounds because of the decimalisation of GBP in 1971. At the time there were very few companies with share prices over the £1 level. So share prices were quoted in pence to offer brokers and investors better pricing.
How do you calculate the value of UK shares?
A share price on it’s own doesn’t give the full value of a company, it’s Market Capitalisation is the true indication of what it is worth.
For example, if Lloyds’ share price is 50 pence (or £0.50 as it is at the moment) and it has 70 billion outstanding shares, the market cap would be:
£0.50 (share price) ×70,000,000,000 (shares outstanding) = £35,000,000,000 (market cap)
This means the market cap of Lloyds is £35 billion, and moves along with the share price. So, if the share price drops to 45p the market cap would reduce to £29nb.
How can you calculate the value of shares you own in a company?
To find the total value of shares you own in a company you just need to multiply the share price (in pounds) by the number of shares.
So, for example, if you own 100 shares in Lloyds at 50p (£0.50) per share, the total value of your shares would be £50.
You can use this forum to work out the value of your shares: (number of shares owned × price per share).
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