As a result of the fact that modern-day traders have access to advanced trading tools and an endless amount of information, many of them are unaware of the humble origins of investment technologies in the stock market or the various technologies that altered the market.
From the creation of the first stock to the algorithms of today, various technologies help to shape and mold the stock market that we have come to know. In this post, we list five key technologies that fundamentally changed the way we invest in the digital era.
Computerized terminals that allow you to buy OTCMKTS EMHTF stock were introduced back in the 60s. Since then, they have grown to be highly sophisticated. Back in the 1960s, a company by the name of Ultronics and Scantlin Electronics was the primary manufacturer of computerized trading terminals. They were dedicated trading machines to which an analyst would use by pressing basic keys to get stock quotes.
Back then, this was a dramatic improvement in the availability of information. In today’s world, advanced terminals from companies such as Bloomberg and Reuters utilize cloud-based software which can be placed into any type of computer. This has given analysts the power to rapidly access real-time news, pricing, execute trades or chat to competitors and clients.’
2) Online Trading
Within the stock market world, it’s a well-known fact that the introduction of electronic trading eliminated the need to use traders. However, online trading technologies were responsible for changing the role of brokers. Prior to the introduction of online trading platforms, investors would have to call a financial advisor so that they can place a trade. By doing this, they would usually have to pay commissions. But by the early 1990s, companies started to develop online trading platforms which helped to facilitate direct selling and buying by operating as a source investors could use to see current stock price information.
3) Mobile Apps
In today’s world, more and more stock trading apps are being developed. These types of apps have helped to make it easier for people to access the stock market. Stock for large companies, such as Tesla or Amazon, can cost hundreds of dollars if not thousands for one share. However, many apps, like Robinhood, allow you to buy a fraction of a share. Nowadays, newcomers can literally invest as little as $1 or $2 in a company by using these types of apps.
This is helping to democratize the stock market because they make investing accessible to individuals who have a limited income. Not only that, but the investment app revolution has also had a significant impact on other top companies within the stock market business sector. Several companies such as Fidelity and TD Ameritrade now provide free commissions and free trades just so that they can keep up with these types of low-barrier apps.
4) Circuit Breakers
While it may not seem like one of the most innovative technologies that were implemented in the stock market, it’s actually one of the most crucial technologies to embrace the stock market. That is because the introduction of circuit breaks was essential to developing stable financial markets.
Circuit breakers are systems that are created to control panel selling, by halting trading on a given exchange when prices become volatile. Circuit breakers were introduced after the market crashed on October 19, 1987. Back then, the DJIA dropped by more than 22% in a single day. This led to a catastrophic collapse in the stock market, which is now infamously known as “Black Monday.”
Circuit breakers are still used in today’s world and are crucial for the sustainability of all stock exchanges across the globe. For instance, as far as the S&P 500 goes, if an index falls below eight percent of its previous close time, trading on all exchanges in the country is halted for 15 minutes.
5) Social Media
Stock prices go up and down as a result of fluctuations in demand and supply. If more people are attempting to sell their stocks, their prices will gradually fall. If more people desire to purchase a stock, its price will increase. The relationship between demand and supply is sensitive to the news topic of the day.
Social media has proven to be an invaluable source of data for modern-day investors because they use it to perform sentiment analysis which means that they track the impact of news on the markets. In fact, using social media to track the impact of news has spawned an entire business sector on its own. Companies, such as Dataminr, dedicate their resources to tracking Twitter data for real-time event changes. Reports suggest that they have a large client list of over 75 entities who have over $1 trillion in assets, collectively.