Does the stock market paint a picture of agitated traders bustling around with eyes on the ticker and ears constantly on the phone? Though it depicts a stark outlook, the history of stock trading over the world is actually interesting and something everyone should learn about. Though as traders, we’re constantly engrossed with the stock market, there are lots of interesting facts in the history of stock trading that we don’t know about.
For instance, did you know that pigs, not bulls or bears created the Wall Street in New York? Read on to know how and find out many more fascinating historical facts on trading.
- In 1652, semi wild pigs dominated the scene in the New World. Residents of Manhattan built a crude wall to protect themselves and their crops from this menace. As you guessed it, the street adjoining the wall came to be called the Wall Street. The wall was later strengthened to keep away human enemies too.
- In the late eighteenth century, trading was an informal activity that took place under a buttonwood tree where people gathered to buy or sell securities. In 1792, 24 stock brokers gathered outside 68, Wall Street under their favorite Buttonwood tree to sign the Buttonwood agreement that led to the creation of New York Stock Exchange.
- The New York Exchange, though immensely popular, was not the first stock exchange in the United States. The pride belongs to the Philadelphia Stock Exchange which was founded in 1790.
- The first stock exchange in the world was established in Antwerp in 1460. This stock exchange dealt with promissory notes and bonds since shares were yet to arrive at the scene.
- The first known share certificate was issued by the Dutch East India Company when it wanted funding for its expeditions to India and the Far East. These shares brought huge profits to investors and were very popular.
- The first known case of insider trading is said to have caused the first stock market crash in US in 1792. William Duer, the Assistant secretary to US Treasury used inside information to speculate on bank stocks. He leaked out confidential information causing other traders to invest in the stocks he held, thus driving their prices up. When the bubble burst, he was rendered bankrupt and the stock market crashed along with him.
- No account of the history of stock trading is complete without a mention of the famous 1929 market crash. In 1929, the market had grown to unprecedented heights; most of the stocks were 400% higher than their 1924 prices. This unnatural increase was bound to crash and that is what happened on October 24, 1929. While most traders were made bankrupt by this crash, a few managed to profit from it; Albert Wiggin, the head of Chase National Bank made huge profits from this crash by shorting his bank stocks.
- The NASDAQ, founded in 1971, is the world’s first electronic stock market. This did away with the need for physical floor space for trading and all transactions were carried on electronically.
The stock market game has been going on for centuries. While it’s a favorite past time to some, others consider this their lifeline. It’s fun to know at least a part of the history of this activity, especially because most of the history keeps repeating itself. Scams and crashes have always been a part of history and will continue to be.