Stock Market Trading: A Concise Overview

 Stock Market Trading: A Concise Overview

Recognizing that the precise origins are lost in the mists of time is the first step in any brief history of the stock market or share trading. While most brief histories of stock market trade begin with Muslim and Jewish merchants in Cairo establishing the first stock market, traditionalists argue that the oldest markets were actually in Italy.


We may probably certainly trace the origins of share trading markets similar to what we know today to the Italians of the thirteenth century. Even as early as the time of the Venetian merchants, insider trading was likely taking place in the markets for government securities. Indeed, a statute was enacted in Venice in 1351 to prohibit the dissemination of rumors with the intent of causing prices to fall.

There was a growing need for stock markets as formal commerce expanded across Europe. Beginning in the 1600s and continuing into the 1700s, Amsterdam grew to become Europe's preeminent stock exchange. There was the first ever stock and bond offering by a corporation. When the Amsterdam Stock Exchange initially began selling shares, it was the Dutch East India Company that did it.

Because of their early pioneering work in this area, the Dutch were able to create many of the financial tools with which we are all familiar. At the time, they brought novel concepts such traded options, short selling, unit trusts, and debt-equity swaps.

Other nations quickly started to look for ways to mimic the Dutch model of commerce after the early success of the Dutch pioneers. The London Stock Exchange may have been the most prosperous for the English. It is still widely believed that the London Stock Exchange (LSE) is the best stock market in the world.

In order to initiate the establishment of economic dominance in the New World, Alexander Hamilton, the first American Secretary of the Treasury, traveled to London. In the late 18th century, Hamilton established the New York Stock Exchange on Wall Street. About fifty years later, the American Stock Exchange became a part of it. On Wall Street, you can still find the NYSE and Amex.

The Dutch East India Company is only one of many legendary stock market success tales. A great number of spectacular financial disasters have also occurred. There is a fascinating and brief history of stock market trading, which includes two of the most noteworthy events—the South Sea Bubble and the 1929 Wall Street crash—but all of them contribute to the whole. 

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