A Stock is Born: The Beginning of the Market’s Existence and Fun Facts
Like all great things, the stock market once had a starting point. This seed didn’t turn into an encompassing plant overnight, but rather was the result of different ideas for profit making. The stock market wasn’t planned out- it just so happened over time.
The stock market we know is the place where company shares, or stocks, are traded. So grab a mug of coffee or tea, and read on to discover the history of the stock market and how it turned into the major exchange it is today.
The first institutions resembling stock markets existed back in 1531, but their main purpose was dealing with issues of debt. Then, in the 1600s, the first company shares were issued and company stock trading began in different places of the world, mainly Europe. U.S. stock market trading didn’t start until around the 1800s. At this point, the government sold bonds in hopes of paying for the war and banks issued stocks.
Street Stock Markets and Wall Street
The New York Stock Exchange was created in 1792 by several merchants. These merchants agrees to trade stocks and bonds everyday outside on the street known as Wall Street. After some time, people realized that this was a form of investing money, and an opportunity to get richer. By the 1900s, numerous stocks were traded on street stock markets.
In 1921, stock markets relocated inside and indoor trading took off. This is pretty much the trading we are familiar with today. Years passed, and the result is millions of dollars of stocks traded annually on numerous major stock exchanges all around the world. In the modern times, stocks are also traded electronically via computers such as through high-frequency trading, or in general, on electronic stock exchanges such as NASDAQ.
Wall Street, What Street?
- “Wall Street” started as a 12 foot high wood stockade in lower Manhattan, designed in 1685 to protect the Dutch settlers.
- The stock market started on Wall Street began in 1792 following the Buttonwood Agreement that was signed by 24 stock brokers and merchants. Following this agreement, the NYSE started.
- In 1867, the first stock ticker was created by Edward A. Calahan.
- The first official mutual fund that was traded was the Massachusetts Investors Trust in 1924.
- The first exchange traded fund was SPDR, created in 1993.
The New York Stock Exchange was actually the second stock exchange, following the Philadelphia Stock Exchange. It began in 1817 after a constitution was adopted by the 24 brokers and firms. Stocks were traded in a call market in which the President of the NYSE would read each stock and the brokers would trade them. This took place twice a day, in the morning and in the afternoon. Originally, stocks were traded at the Tontine Coffee House at 82 Wall Street until 1817, the corner of Wall and Water Streets.
- The first time that a million shares were exchanged on the NYSE was December 15, 1886.
- In 1982, that record grew to 100 million.
- In 1997, a billion shares are exchanged.
- In 2001, 2 billion shares are exchanged.
- By 2007, over 4 billion shares are exchanged.
Random Stock Market Facts
- NASDAQ (National Association of Securities Dealers Automated Quotation) was created in 1971 and originally focused on OTC stock trading. On its first day, 2,500 stocks were traded.
- The highest price per share stock on NASDAQ is Google, with shares at $616.50.
- The Dow Jones Industrial Average (DJIA), created in 1896, reached 1,000 shares in 1971; 5,000 shares in 1995; and 10,000 shares in 1999.
- The oldest company on the DJIA is General Electric, added in 1907 and the newest is Kraft Foods, added in 2008.
- The DJIA’s largest single day drop was September 29, 2009. The index fell 777.68 points. October 13, 2008 was the day of the largest single day gain on the DJIA. The index grew by 936.42 points.
- Since 1953, there are at least a million shares traded on the NYSE each day.
NOTICE: This article was based on research of stock market information and other sources of information, found both online and in print media. Neither StockTips.com nor any of its owners, contributors, officers, directors, consultants, or employees take responsibility for the accuracy of the information contained in this article or the accuracy of the information on which this article was based. StockTips.com was not compensated by any of the companies mentioned in this article for the preparation of this material, nor were the materials approved by the companies which were mentioned.