How Have Trading Platforms Evolved Over Time? The Journey From Open Outcry to Electronic Trades
The nature of financial markets is always changing. This has also been changing the trends in trading platforms.
This competitive nature of trading platforms started back in 1975 when the US introduced negative commissions. This is also when electronic trading began. This caused an uncertain environment for the broker community but at the same time also increased efficiency. Let’s take a look at how the trading trends evolved with time.
How Stock Traders Came into Existence
The history of trade goes back to the origin of humankind. But modern trade started with the stock trading back in the late 16th century. Many different investors who couldn’t afford to start a business on their own pooled in to form joint-stock companies. Now, these investors became the business partners and co-owners of the shares in the business. This is how stock trading came into existence. Back then, the trading platform was the paper shares.
The WallStreet Wolfs
Using the paper shares, the traders were trading stocks and investing them. As time passed by, the businessmen started having problems with maintaining the business. This is when an official contract was signed and an organization that would change the world’s trade market was born. The market on Wall Street opened on 17th May 1792 and provided the traders and investors with the opportunities never seen before.
How different trading platforms work
Wall Street today includes the bond market, foreign exchange market, futures market, and the commodities market. That means it provides opportunities to trade stocks, trade forex, trade cryptos, trade indices, trade CFDs, and much more. Let’s take a look at how each of these and many other components of trade market work:
Trade and Invest Forex:
Forex exchange is the changing of different currencies into others. This is done for various reasons. As the reasons for the exchange increased, businessmen and investors came up with another opportunity. To invest forex and then trade forex. The forex traders invest forex and predict the rise and fall in the prices of the currency they invested in. As they find a profit spot in the trend, they trade forex and gain from it. Forex trading is quite a trend today.
CFD or Contract for difference trading started in the 1990s. This type of trading does not require the owners to actually own an asset. The trader invests CFD and waits for the trading to close. It revolves around the price movement of shares only. As the trade closes, if the share price has increased, the seller pays the buyer the difference and if it decreases then the buyer has to pay the seller the same price.
The biggest evolution that the world saw in trading platforms was the trade to come online. As every trade started going online, an idea came up with a new platform that will be completely digital. Even the assets in the trade will be digital. That’s when blockchain was introduced. A digital currency came into being and is being traded. To trade crypto, one has to be the shareholder of the blockchain. It is just like forex trading only the currencies being used are not paper currencies.
You can exchange your digital currency into the paper money as well but it is traded only with digital currencies. It can be any of the following popular and more cryptocurrencies:
Bitcoin, Lite coin, NEO, EOS, Ethereum, Ripple, Stellar Lumens, and several derived currencies, including Bitcoin Currency and Bitcoin gold.
The new trends of trading are changing on the daily basis. To keep yourself updated with all these trends, stay tuned to Market Business News.