The evolution of share market trading

The evolution of share market trading has come a long way since its inception in the 17th century. The concept of trading shares of companies on an exchange has evolved into a more sophisticated and complex system, shaped by technological advancements, changing regulations, and market participants.

In the early days, share market trading was conducted in coffeehouses and under the shade of a tree. Here, brokers would gather and trade stocks on behalf of their clients. The first stock exchange, the Amsterdam Stock Exchange, was established in 1602, and the first stocks were traded by the Dutch East India Company. The London Stock Exchange followed in 1801, and the New York Stock Exchange was founded in 1817.

Until the late 20th century, share market trading was mostly done through a system called open outcry. This was where traders would physically gather on the trading floor and shout out buy and sell orders to each other. However, in the 1980s and 1990s, electronic trading platforms started to emerge. By the turn of the century, most trading had moved to electronic platforms while considering brokerage charges.

The rise of electronic trading has led to several significant changes in the way share market trading is conducted. Firstly, it has made the process more efficient and faster. Orders can now be executed almost instantly, and there is no longer a need for physical trading floors. The use of algorithms and high-frequency trading has increased, enabling traders to execute large volumes of trades in a fraction of a second within brokerage charges.

Secondly, electronic trading has made the market more transparent. Previously, only traders on the trading floor had access to real-time market data, but now anyone with an internet connection can access real-time prices and news. This has also led to the rise of online brokers, which have democratized share market trading and made it more accessible to individual investors.

Thirdly, electronic trading has also made the market more susceptible to technical glitches and trading errors. Flash crashes, where prices drop suddenly and rapidly, have become more common, as have trading errors caused by algorithmic trading. As a result, regulators have had to adapt their rules and regulations to ensure the market remains fair and transparent while considering brokerage charges.

Another significant development in share market trading is the emergence of alternative trading platforms, such as dark pools and electronic communication networks (ECNs). These platforms allow traders to buy and sell shares without displaying their orders on the open market, providing greater anonymity and potentially better prices. However, they have also been criticized for reducing market transparency and increasing the potential for market manipulation.

In recent years, the rise of digital money and blockchain technology has also disrupted the share market trading industry. The money is traded on digital exchanges, and the use of blockchain technology allows for greater transparency and security in the trading process. While digital money is still a relatively small part of the overall market, its growth and potential have caught the attention of investors and regulators alike using brokerage charges.