Stock trading is one of the oldest types of trading prevalent for centuries. Even now it is a major form of trading practiced and followed worldwide. In this article, let us see how stock trading has developed technologically for centuries.
- The stock trading can be dated back to the 1300s, where the trading of debt bonds was dealt with in Venetia, Europe.
- An exchange was started in Belgium around 1531 in Antwerp. These exchanges tradedpromissory notes and bonds. The real stocks were not present at the time. But these trades gave profits as the traders could earn in stock trading.
- In1611, the Dutch East India Companywas the first publicly traded company. Amsterdam stock exchange was the first officially formed stock exchange. These trades mostly dealt with hedgingthe risks involved in the debt. Lenders tried to protect themselves from the risks involved in lending by hedging their risks.
- Publicly listed companies came into prevalence with the East India companies of the British. Here, the investors invested their money and were paid back dividends from the profits of the company.
- But there was no specific stock exchange present at that time. The stock of the East India Company was issued on paper in thecoffee shops of England. The cost of the shares will be posted on the door of the coffee shop or mailed to the investor.
- London stock exchange was formed in 1773.
- 1790 – The Philadelphia stock exchange was the first stock change that was created in the U.S.
- New York Stock exchange was formed after 19 years from when the London stock exchange was formed, in 1792.
- Many other European, American and Asian countries also started to develop their own stock exchanges.
- Telephones and computers came into stock trading and changed the way stock trading was happening. In 1878, the first telephone was installed in the New York Stock Exchange.
- TheNew York Stock Exchange was one of the biggest exchange in the world. It stands to be the biggest exchange even now internationally.
- Though derivatives trading was practiced from ancient times, modern derivative trading in stocks was introduced around the 1970s.
- NASDAQ was the first stock exchange that was made completely electronic. There was no physical space for NASDAQ rather it was the network of computers executing the trade electronically. This was the birth of the first electronic stock exchange in 1971 with electronic stock quoting system.
- Human traders are now outperformed by Computer algorithms and programs. Artificial intelligence technology would play the main role in stock trading in the upcoming years.
As a final note, Stock trading has been through a lot of developments and it will be developing more in the future also. Stock trading will change its forms but the essence of it will remain the same. What do you think is the future of stock trading? Comment your answers below without fail.
To understand the basics of stock trading, you can read our article on Stock trading: All you need to know about.
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