Tahoe-Truckee Market Beat: We’ve come a long way since the Buttonwood Agreement
Special to the Sun
The evolution of global stock markets has been truly extraordinary in the internet age. Today, information travels around the globe in a matter of seconds. Trading stocks today is easier than it ever has been.
Markets have come a long way since the original Buttonwood Agreement was signed on May 17, 1792.
Those brokers met under a buttonwood tree located outside of 68 Wall Street in New York. Originally, there were 24 brokers, and they made an agreement to only trade with each other.
At the beginning, there were five listed stocks that they traded. In 1793, they moved their trading operation indoors into a coffee house known as The Tontine Coffee House.
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The name of their exchange was “The New York Stock and Exchange Board.” It did not become known as the New York Stock Exchange until 1863.
Stock prices were hand-delivered until the invention of the telegraph and the ticker tape.
NYSE has been the world’s dominant stock exchange for many years; however, it was not the first.
In the 1500s, there was a stock exchange in Belgium, but they primarily traded bonds. The first exchange in London was established in 1773, 20 years before the Buttonwood Agreement was signed.
The ticker tape was invented by Edward Calahan in 1863. Thomas Edison improved it in 1869 with the invention of the Universal Stock Ticker, and the ticker tape remained in use until the 1970s.
Starting in the 1970s, television and computers began to be used to transmit stock prices. In the old days, clients had to call their brokers on a landline and speak to an actual person who would place their trade for them.
The brokers had to hand write a ticket and carry it to a wire operator, who sent the order to the exchange.
Electronic trading got started in the early 1980s, but really got going in the 1990s. In 1994, there were 12 online discount brokerage firms, and by the year 2000, more than 140 were in business.
Today, orders can be placed in seconds via computers, and handheld devices like smart phones. The average daily volume of the NYSE composite is 792,711,049 shares — that’s more than three-quarters of a billion.
I wonder if the original 24 Buttonwood brokers had any idea what they were starting.
Kenneth Roberts is a Truckee-based Registered Investment Advisor. Information is at his blog at http://www.sellacalloption.com or 775-657-8065. The mention of securities should not be considered an offer to sell or solicitation to buy investments mentioned. Consult your investment professional to understand the risks and/or how the purchase or sale of these investments may be implemented to meet your investment goals. Past performance is no guarantee of future results.
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