I am curious how stock markets worked before the advent of computers. Trading today is so fast, I can’t wrap my head around how it could have worked before computers were involved.
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They used to trade stocks under a tree near Wall Street, back when the wall was there. Options contracts are mentioned in the bible.
Trading didn’t happen as fast. 😛
You had individuals shouting orders at each other and conducting trades in person.
Mr. Smith would offer 1000 shares at $14 and Mr Jones would say “I’ll give you $13.50”. Then Mr. Smith would shout back, “will you take $13.75” and a deal would happen.
The bid/ask spread in those days was HUGE, even for a well known stock.
Today you can bid fractions of pennies. Before 2001, you could have prices in fractional terms of 1/16th units.
That’s 6.25 cents in price difference.
You ever see movies of a fast-moving food market where people are bustling and hustling trying to buy food and others doing the same to sell food?
Imagine that but selling pieces of paper that represent stock shares.
small pieces of paper littered all over the trading pit floor and telephones?
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