The stock market has a long history that makes it difficult to pinpoint an actual moment in time when it was created. People have used trading as a form of business since the beginning of time. However, they did not begin trading shares in companies, government and debt until the 12th century. Since that time, different stock exchanges have been established throughout the world to maximize the return on investments and attempt to minimize risk.
Venetians and French
During the 12th century, businessmen in France and Venice established trading stocks and commodities. In France, brokers called the courratiers and later the agents de change, began managing farming community debt for local banks. About 1250, the city of Toulouse began trading shares in the Bazacle Milling Co. About 50 years later, Venetians began trading government securities. This soon spread to neighboring territories. During this time, the sale meetings were mostly informal because there was no official meeting place to trade stocks.
Belgium also played a significant role in creating the stock market. The Brugse Beurse, commodity traders, formalized stock meetings by establishing a meeting place. In 1531, brokers met in a building in Antwerp to exchange business, government and personal debt. This was the first building designed for stock exchange. Although these meetings often produced income, the shares did not actually exchange hands. Belgium's successful stock exchange quickly spread to neighboring countries such as Ghent and Amsterdam.
During the 1600s, the East India Trading companies sought investors who were willing to finance dangerous voyages to the East Indies and Asia in exchange for a share of the profits when the ships returned. As a way to spread out the risk, people invested in multiple ships. In addition, the ships would pay dividends for all of the voyages rather than for a single voyage. Investors also began trading their shares of the East India companies among themselves.
London Stock Exchange
The largest European stock exchange today is the London Stock Exchange. During the trading of the East India companies, investors would post their items for sale at coffee shops such as that of John Castaing, who posted a list of stock prices in 1698. In 1761, 150 men formed a club to buy and sell stock. In 1773, they built The Stock Exchange building in Sweeting's Alley. The official London Stock Exchange was established on March 3, 1801. At this point, the brokers begin regulating stock exchange.
America's stock exchange history began 19 years after the London Stock exchange group was formed. In 1790, the Philadelphia Stock Exchange was established. Two years later, on May 17, 1792, 24 merchants from New York met under a Buttonwood tree to form the New York Stock Exchange. The stock exchange building was located at 11 Wall St. in New York City. Because of its prominent position, the New York Stock Exchange quickly replaced the Philadelphia Stock Exchange as the most powerful in the United States.