What was it like to trade stocks before electronic trading took over?

Today stocks are traded electronically. Even programmed trading has become a popular way to trade stocks more frequently. But there was a time when actual stock certificates were traded instead of their electronic form which is very common today. By the time I started trading the electronic trading had become the most popular way to trade stocks. If you are like me, have you ever wondered what was it like to trade before dematerilization?

I got a chance to learn about experience of an Indian stock trader who was a regular trader when physical stock certificates were used. Here's what I learnt -

• Stock exchanges used to appoint people to display stock prices.
• There were employees appointed by exchanges to watch trading activities. 
• Changes in stock prices were not as frequent as we see now a days. On an average prices used to change after every 15 minutes.
• Just like today the movement in stock prices used to depend on script or market volatility.
• All the restaurants near major stock exchanges used to be full.
• There used to be a speaker device in stock exchanges and offices of brokers. Announcers used to announce prices of the most traded stocks continuously.
• It was possible to know that which stock is being bought by which operator.
• Markets were full of gossip mongers and a lot of insider information was available to people back then which is not the case now a days.
• Future & Option trading was not there but there was Carry Forward trading.

Next: Click here to read why do we have multiple stock exchanges?

I will add more bullet points about what was it like to trade when trading was mostly a paper-based activity. If you wish to share your trading experience before electronic trading took over, please feel free to leave us a comment.

Happy Trading!

Posted By Ashish AgarwalTuesday, March 08, 2016

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