Stock Trading History Of The United States

Talking about the Stock Market we seem to mean a different
dimension, not a physical location However, the Stock Market
does have physical locations
Wall Street, also known as the Dow, or the NYSE, is located in
New York
Wall Street is the Address(or is it?)
Many people think of Wall Street and the Stock Market as one in
the same, and indeed, it used to be that way
Dutch settlers initially built a stockade here in 1653 for
defense purposes In 1685 the stockade was torn down and a
street was built called Wall Street In 1790 the first Stock
Exchange was founded in Philadelphia which became the model for
the New York Stock Exchange
In 1817 the NYSE was officially opened The NYSE was moderately
successful till the early 1900’s when the market entered a boom
period which lasted more or less until 1929
This boom period of course could not last forever, things were
so out of kilter that people were mortgaging their homes and
leveraging themselves to the limit to buy shares The boom
period crashed in 1929 and caused the Great Depression
The 1929 Crash was caused in part by the fact that the Stock
Market was virtually unregulated, which it remained even until
after the market crash of 1987 which saw the Dow suffer what was
the largest losing day in the Market’s history
Black Tuesday – October 29th, 1929
On Black Tuesday, a record of 164 million shares were traded
and the ticker tape fell behind two and a half hours On Monday,
the stock market suffered a record one-day loss of around 13
percent On Black Tuesday, the market suffered a loss of about
12 percent and did not recover for 22 years
The economy eventually recovered from its catastrophic losses
but the unregulated Stock Market practices that had partially
caused the crash in the 1929 still existed and caused the stock
market crash of 1987, which saw the Dow Jones suffer what was
the largest single-day loss in the stock market’s history
Today’s Stock Market
Today’s stock market consists of about 500,000 computers all
networked with dealers for the NYSE or market makers for the
NASDAQ Up until recently the Dow still used human intervention
but at present all trades are computerized
The 2 most important stock market networks are the NYSE and
NASDAQ NASDAQ is a relatively new Stock Trading System that has
been computerized since its inception, where market makers
normally lead trades
It used to be that more risky stocks were traded on the NASDAQ
than on the NYSE, but that distinction is fading
The difference between the NYSE and Nasdaq is in the way
securities on the exchanges are transacted between buyers and
sellers
The Nasdaq is a dealer’s market, wherein market participants are
not buying from and selling to one another but to and from a
dealer, which, in the case of the Nasdaq, is a market maker
The NYSE is an auction market, wherein individuals are
typically buying and selling to each other and there is an
auction happening; the highest bidding price will be matched
with the lowest asking price
All these computers are linked to computers worldwide These
computers can be found in banks, small businesses, and large
corporations
These computers comprise the banking networks which make
computerized transactions possible To give you an idea as to
how much gets traded: in New York City Stock Market Trades
amount to over $22 trillion dollars daily
How has the US Stock Market done in Times of War?
The worst Stock Market returns were achieved during the Vietnam
WarIf this happened because of the uncertainty of the times is
a good question Stock Markets do not like uncertainty and will
act negatively
Returns during the Korean War however were excellent and
averaged about 18% per year while 2nd world war returns averaged
about 13% per year The 1987 Stock Market Crash
The crash of 1987 was one of the most remarkable financial
catastrophies of the 20th century, perhaps since the start of
the financial system several centuries ago Why it was so
strange because it should not have happened and even today we
cannot fully comprehend that it did happen
Markets fell, an unbelievable 23%, and that they did so all over
the world at the same time It only lasted one day
There is no explanation No definite reason for the crash has
been isolated The best that one can say is that there were too
many similarities to the 1929 crash and that this became a
self-fulfilling prophecy

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