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The History of Online Stock Trading

The History of Online Stock Trading
The Siliconreview
28 March, 2019

Before a handful of software and before electronic stock trading, people were Stock Trading Brokers, and landlines were the vessel in which they completed their sells and buys. Now, it’s possible to get almost any information about stocks and trading through the internet—for lack of better phrases, “At the click of a button."

People are able to trade all across the world with ease, which in turn, helps to boost economies all over. The use of computers and easy access has been a prominent cause for the increase in accessible stocks to the public. Although changes have occurred quite rapidly, it's necessary to understand where online stock trading began.

ECNs

Electronic Communication Networks (ECNs) were the first systems used by brokerages as an advantage in stock trading. ECN software was consistently being developed by brokerages because of the increase in results they were creating. Their contribution to stocks marked a revolution when brokerages figured out they could easily match buyers and sellers through digital transactions.

Basically, when the public access internet service and electronic stock trading industry came together, they made easy access attainable for investors. However, as the years passed, the stock market was still developing, but not as quickly due to the 1987 stock market crash. Once investing became exclusive, it was had to find a person who wasn’t investing in stock.

Joining The New Industry

Due to the new changes, many companies joined the stock industry—Tradeplus, The New York Stock Exchange, TD Ameritrade and more—as the increase grew, so did the number of people joining the stock industry. Even NASDAQ played a prominent role in the development of the industry. The National Association of Securities Dealers Automated Quotation System, is responsible for developing the world's first electronic stock market. This made it possible to ditch the auctioning of markets. The need for people as brokers is becoming more obsolete by the day, which means there is more open-access to the industry, leaving each trader at a loss.

The Future of The Industry

The internet has become a staple for investing, as it has continuously lowered fees for investors in regards to trade securities. On the other hand, it's been said already that brokerages were once responsible for all exchanges, but since the industry is now technology driven, brokers will continue losing out on their own commissions.

Bottom line is, it’s no longer mandatory to dial a phone number to call a stock broker because stockbrokers are no longer in demand. Now, investors have all-of-the-time access to the internet, which has unlimited amounts of financial documents. There are a variety of analysis tools for investors and traders, which means the future of the stock industry is a bright and continuously growing one.