The trading of financial instruments began almost 900 years ago. The first people to be identified as brokers managed debt in 12th century France. Venetian bankers began trading securities during the 13th century. Founded in 1602, the Dutch East India Company was the first joint stock company, and its shares were traded in Amsterdam. Dutch traders pioneered many of today’s common trading practices, such as options and short selling.
The roots of the New York Stock Exchange (NYSE) can be traced back to the late 1700s, when 24 stockbrokers signed an agreement under a buttonwood tree on Wall Street in New York City. The aptly named Buttonwood Agreement stated that the 24 brokers involved would only do business with each other and would use a set commission rate of 0.25%. To this day, the NYSE is the world’s largest stock exchange, with a daily trading value of almost $50 billion.
The world’s second largest stock exchange, the NASDAQ, was founded in 1971 by the National Association of Securities Dealers (NASD) and was the world’s first electronic stock market.