It’s hard to quantify the total value of the global stock market, although we do know that this vast entity has a total market capitalisation of more than $30 trillion.
The growth of this market has certainly pronounced over the years, with stock and equity trading having evolved from incredibly humble beginnings to become a huge tech-led entity in the digital age.
In this post, we’ll briefly chart the history of stock trading while appraising the evolution of trading platforms over the years.
In the Beginning – The Launch of the Stock Market
Interestingly, the history of trading can be traced back to the origin of humankind, with the ancient barter system offering a relevant case in point.
However, the contemporary stock market that we know and love today dates back to the late 16th century, at which stage this was a small and burgeoning entity that encouraged investors who couldn’t afford to start a business to pool their resources and form joint-stock companies.
At this point, the stock market was defined by paper shares, and a little over 100 years later we saw the launch of America’s iconic Wall Street.
This followed the numerous issues that were associated with paper shares and maintaining profitable businesses, which created demand for an organisation that would ultimately revolutionise trading and create access to a raft of other diverse marketplaces.
Wall Street officially opened its doors on May 17th, 1792, although none of us recognised at the time that it would ultimately create a viable template for online trading platforms and virtual apps.
The Rise of Tech and Online Trading
This also opened the way for the diversification and globalisation of the financial markets, as futures and forwards contracts evolved to allow for extensive hedging practices.
Corporeal stock exchanges also opened across the globe, with prominent entities in New York, London, Paris and Tokyo creating a marketplace that was increasingly accessible around the clock.
The 1960s also saw the transition towards computerised and fully automated trading, with this having progressed relentlessly and well into the 21st century. This has gradually broken down many of the historical barriers to entry that once surrounded the global markets, providing far greater accessibility to part-time traders and created the potential for high volumes of real-time trading.
As a result of this, traders can now access a diverse and lucrative portfolio directly through online platforms. This has also paved the way for automated and high-frequency trading, while allowing traders to speculate on various price movements while minimising their risk.
As we can see, the world of trading has evolved immensely from relatively humble beginnings, and the recent introduction of technologies such as AI and big data will ensure that this process continues well into the future.