History Of The Stock Market


Part of the elements important in global economy are the stock markets. The growth of world economy depends on the stock markets. Although stock markets do not play a major role in world economic growth, it is good to note that it is an important force in driving world economy. One is lead to ask the question, what is a stock market? How did stock markets come into place?

Meaning of stock markets

The stock market is a network of transactions that brings both buyers and sellers of stocks — which indicates ownership of businesses. This may include private trades or securities that are listed publicly on the stock exchange. Examples of securities that are traded privately could include shares that are made available to investors via equity crowd funding platforms. Other types of securities also include convertible bonds and corporate bonds.

Early stock markets

In the early 1500s, the first stock markets arrived although there were markets similar to it. One of these examples can be depicted in what happened in France when agricultural debts were managed by courretiers de change. The system was an effective trade system back then. Later on, the merchants of Venice surfaced in the 13th century when government securities were traded instead. Soon afterwards, Italian bankers joined the system.

Stock-less markets

The first “stock” markets in the world can be traced back to Belgium . Other countries like the Netherlands and so on had introduced their own variation of the stock market system in the early 1400s and 1500s.

But world widely acknowledged is the fact that the first stock markets arose in Antwerp, Belgium. Antwerp was not only a large city of commerce , it was also where the famous Van Der Beurze family resided prompting the stock markets to be called by the name Beurzen. The only thing left to make these market systems work then was stocks. At that time, instead of stocks or shares to be traded, it was debt, government affairs or businesses but their systems were similar to present day systems.

First actual stock trades

In the 1600s, the first company to finally trade shares was the Dutch East Indian company. They had released the shares of the company through the Amsterdam stock exchange. Among other things traded included bonds and shares and as an investor in the company, you were entitled to a certain percentage of the profits coming from the company.

Early stock exchanges were carried out in coffee shops. Stocks were written by hand on paper and traded across the room. It was later that they decided that a more efficient place for stock exchange to take place was needed.

Although there was a ban on issuing shares, the London stock exchange arose in 1801. Shares issued were limited until the 1825. Then came a historical event which brought up the New york stock exchange in the year 1817.

Fast forward to modern day, so many stock markets have been created in every country of the world in order to facilitate trades and investments from both local and foreign participants.

Author of this article is Linda Hamilton. She is a professional unh stock prediction expert. Linda is from New York. She studied at Stanford University.