Although stock trading dates back as far as the mid-1500s in Antwarp modern stock trading is generally recognized as starting with the trading of shares in the East India company in London.
THE EARLY DAYS OF INVESTMENT TRADING..
Thoughout the 1600s, British,French and Dutch governments provided charters to a number of companies that included east india in the name.All goods brought back from the east were transported by sea,involving risky trips often threatened by severe stooms and pirates.To mitigate these risks,ship owners regularly sought out investors to proffer financing callateral for a voyage.In return investors received a portion of the monetary returns realized if the ship made it back successfully ,loaded with goods for sale.These are the earliest examples of limited liability companies (LLCs) and money held together only long enough for one voyage.
THE EAST INDIA COMPANY…
The formation of the east india company in london eventually led to a new investment model,with impoting companies offering stocks that essentially represented a fractional ownership interest in the company, and that therefore offered investors investment returns on proceeds from all the voyages a company funded,instead of just on a single trip.the new business model made it possible for companies to ask for larger investments per share,enabling them to easily increase the size of their shipping fleets.investing in such companies,which were often protected from competition by royally issued charters became very popular due to the fact that investors could potentially realise massive profits on their investments.
THE FIRST SHARES AND THE FIRST EXCHANGE..
Company shares were issued on paper enabling investors to trade shares back and forth with other investers, but regulated exchanges did not exist until the formation of the londan stock exchange(LSE) in 1773. Although a significant amount of financial turnmoil followed the immediate establishment of the LSE,exchange trading overall managed to survive and grow throughout the 1800s.
STOCK MARKET PLAYERS .INVESTMENT BANKS, STOCK BROKERS, AND INVESTORS ..
There are a number of regular participants in stock market trading..Investment banks handle the initial public offering (Ipo) of stock that occurs when a company first decides to become a publicly trading company by offering stock shares.
Here’s an example of how an IPO works. A company that wishes to go public and offer shares approaches an investment bank to act as the under writer of the company’s inital stock offering . The investment bank after researching the company’s total value and taking into consideration.what percentage of ownership the company wishes to relinquish in the form of stock shares, handles the initial issuing of shares in the market in return for a fee,while guaranteeing the company a determined minimum price per share.It is therefore in the best interests of the investment bank to see that all the shares offered are sold and at the highest possible price.😍
Himanshu singh Rajput 