Stock Market Trading before Intra day Trading was Invented
April 30, 2020
Day trading is also known as intraday trading. But have you ever imagined what the scenario was before intra day trading was invented. Day trading is specifically buying and selling financial instruments within the same trading day, such that all positions are closed before the market closes for the particular trading sessions.
Traders who trade in this capacity with the motive of profits are basically speculators. And especially before the popular digitalization of the stock market. It was after that moment when there were more than 1000 technical tools to assess the stock. Since this day also there are people who are merely speculators and don’t care about the overall market condition.
Day trading can be traced all the way back to 1867. Contrary to what many people believe, intra day trading did not emerge with the rise of computers or the internet. In fact, it traces its history back to even before electricity.
Intra day trading can be traced back to 1867. Soon after the telegraph was invented, stock markets used the telegraph’s communication technology to create the first ticker tape. Ticker tape made it easy to communicate information about transactions occurring on the exchange floor with brokers.
But in India the day trading was introduced in 1990s. Before that it was done just like barter system, where Gujarati traders and Parsi traders would mutually buy or sell shares. Infact sometimes people would gather and some of the assets were traded on. It was more like an auction where mostly the raw materials were traded.
But that was not enough. Only the very rich class of traders could participate. And it was also limited by the reach of the people. For example, some people living in a particular society or area would be able to trade with each other. And another group of people in a specified group could trade with each other.
A common practice known as short selling was not possible. People would only buy the shares and hold them for a certain period of time ranging from 1 day to 1 year. But when the intra day trading was introduced people would actually sell stocks before buying them. This practice increased the earning potential of investors. And after this trading was a boom, more and more brokers would offer discounted brokerage and would provide more leverage. Doing so, more and more people could take part in intra day trading, be it small investors or large investors.
And today we can observe that within every 20 people there is an intra day trader. We at Venteskraft provide the best stock market training, with a practical approach.
