The History Of Stock Exchange!

The History Of Stock Exchange!

The New York Stock Exchange today is almost synonymous with stocks and shares. This is where everyone (in the corporate sense), who is anyone; lists their stocks and trades them. You must have heard people talk about ‘stocks’ in both specific and general sense, while they do mean stocks but, they are also referring to all those companies listed on the stock exchange is New York, which is also known as the big daddy of the big leagues in the field of finance.

This might be the scenario today, but it would be surprising to know that the first stock exchange did not involve any stocks whatsoever. There have been a number of evolutions throughout history leading to where the stocks stand today.

By definition, “A stock, is the capital raised by a company or corporation, through the issuing and underwriting of securities and equities.”According to Investopedia, “A stock is a type of security that signifies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings”. Today stocks are mainly of two types, common stock and preferred stock. While the preferred kind of stock gives the owner a higher claim on the assets and earnings, the common stock usually makes the owner entitled to vote at shareholder meetings and to receive dividends.

While historically speaking, it was in Belgium that the first stock market was opened, although at this time there were no real stocks to deal with. This was contemporary to the Venetians and various other Europeans who would carry slates with them, in the bid to buy and sell securities from the government. Although the most relatable, historical example would be that of the scores of East India Companies, that came to be during the period of Economic Imperialism.

It was the governments of various countries and their countrymen namely, the French, Dutch and British, who had stakes in the profits of these companies, functioning in Asian and African continents. During this period, the only kind of trade possible was by sea and there were a lot of chances of valuable goods and wealth being lost to the ocean. Thus, to protect themselves from these calamities, the merchants and traders used to look for various investors, who would put their money both on the ship and the crew, thus gaining certain amounts of returns in the end.

During this time, it was the coffee shops all over Europe, that became the most important hubspots for merchants, brokers and investors to gather and buy and sell shares. The East India Company’s era was the time when a lot of evolution took place, in the stock market sphere; mainly because of the presence of a government-backed monopoly. It was the Philadelphia Stock Exchange that came into being before the New York Stock Exchange, although the later proved to be more powerful. And the rest of it is history since then.

Today with the emergence of NASDAQ, the field of stock exchange received a new lease on life, through this network of computers, which executed trades electronically. As it stands today, the field of Investment Banking is still considered to be one of the most challenging and rewarding fields. Professionals here are looked up to for their exemplary negotiation skills and finesse in closing multi million dollar deals.

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