Stock Market History

History of stock market trading in the United States can be traced back to over 200 years ago. Historically, The colonial government decided to finance the war by selling bonds,
government notes promising to pay out at profit at a later date. Around the same time private banks began to raise money by issuing stocks, or shares of the company to raise
their own money. This was a new market, and a new form of investing money, and a great scheme for the rich to get richer. A little futher on the history tumeline, more
specifically in 1792, a meeting of twenty four large merchants resulted into a creation of a market known as the New York Stock Exchange(NYSE). At the meeting, the
merchants agreed to meet daily on Wall Street to daily trade stocks and bonds.

Further in history, in the mid-1800s, United States was experiencing rapid growth. Companies needed funds to assist in expansion required to meet the new demand.
Companies also realized that investors would be interested in buying stock, partial ownership in the company. History has shown that stocks have facilitated the expansion of
the companies and the great potential of the recently founded stock market was becoming increasingly apparent to both the investors and the companies.

By 1900, millions of dollars worth of stocks were traded on the street market. In 1921, after twenty years of street trading, the stock market moved indoors.

History brought us the Industrial Revolution, which also played a role in changing the face of the stock market. New form of investing began to emerge when people started to
realize that profits could be made by re-selling the stock to others who saw value in a company. This was the beginning of the secondary market, known also as the speculators
market. This market was more volatile than before, because it was now fueled by highly subjective speculation about the company’s future.

This was the pretext for appearance of such stock market giants as NYSE. History books tell us that the reason the NYSE is so highly regarded among stock markets was
primarily because they only trade in the very large and well-established companies. It acted as a more stable investment alternative, for people interested in throwing their
capital into the stock market arena. The smaller companies making up the stock market formed into what eventually became the American Stock Exchange (AMEX). Contrary to
the 80-year old history, today the NYSE, AMEX, NASDAQ and hundreds of other exchange markets make a significant contribution to the national and global economy.

The growth in the number of market participants led the government to decide that more regulation of the stock market was needed to protect those investing in stock. History
was made in 1934, when following the Great Crash, Congress passed the Securities and Exchange Act. This act formed the Securities and Exchange Commission (SEC),
which, through the rules set out by the act and succeeding amendments, regulates American stock market trading with the help of the exchanges. It also includes overseeing
the requirements for a company to issue stock shares to the public and ensures that the company offers relevant information to potential investors. The SEC also oversees the
daily actions of market exchanges and how they trade the securities offered.

Although historically, investing in stocks was a “hobby” for the rich, an average person too soon came to realize the value of the investing in stocks vs. traditional assets like land
or a house.

History of Indian stk mrkt

The Bombay Stock Exchange (BSE) is known as the oldest exchange in Asia. It traces its history to the
1850s, when stockbrokers would gather under banyan trees in front of Mumbai’s Town Hall. The location
of these meetings changed many times, as the number of brokers constantly increased. The group
eventually moved to Dalal Street in 1874 and in 1875 became an official organization known as ‘The
Native Share & Stock Brokers Association’. In 1956, the BSE became the first stock exchange to be
recognized by the Indian Government under the Securities Contracts Regulation Act.

The Bombay Stock Exchange developed the BSE Sensex in 1986, giving the BSE a means to measure
overall performance of the exchange. In 2000 the BSE used this index to open its derivatives market,
trading Sensex futures contracts. The development of Sensex options along with equity derivatives
followed in 2001 and 2002, expanding the BSE’s trading platform.

Historically an open-cry floor trading exchange, the Bombay Stock Exchange switched to an electronic
trading system in 1995. It took the exchange only fifty days to make this transition.

Capital market reforms in India and the launch of the Securities and Exchange Board of India (SEBI)
accelerated the integration of the second Indian stock exchange called the National Stock Exchange
(NSE) in 1992. After a few years of operations, the NSE has become the largest stock exchange in India.

Three segments of the NSE trading platform were established one after another. The Wholesale Debt
Market (WDM) commenced operations in June 1994 and the Capital Market (CM) segment was opened
at the end of 1994. Finally, the Futures and Options segment began operating in 2000. Today the NSE
takes the 14th position in the top 40 futures exchanges in the world.

In 1996, the National Stock Exchange of India launched S&P CNX Nifty and CNX Junior Indices that
make up 100 most liquid stocks in India. CNX Nifty is a diversified index of 50 stocks from 25 different
economy sectors. The Indices are owned and managed by India Index Services and Products Ltd (IISL)
that has a consulting and licensing agreement with Standard & Poor’s.

In 1998, the National Stock Exchange of India launched its web-site and was the first exchange in India
that started trading stock on the Internet in 2000. The NSE has also proved its leadership in the Indian
financial market by gaining many awards such as ‘Best IT Usage Award’ by Computer Society in India (in
1996 and 1997) and CHIP Web Award by CHIP magazine (1999).

Bse history

Bombay Stock Exchange is the oldest stock exchange in Asia with a rich heritage, now spanning three
centuries in its 133 years of existence. What is now popularly known as BSE was established as "The
Native Share & Stock Brokers' Association" in 1875.
BSE is the first stock exchange in the country which obtained permanent recognition (in 1956) from the
Government of India under the Securities Contracts (Regulation) Act 1956. BSE's pivotal and pre-eminent
role in the development of the Indian capital market is widely recognized. It migrated from the open outcry
system to an online screen-based order driven trading system in 1995. Earlier an Association Of Persons
(AOP), BSE is now a corporatised and demutualised entity incorporated under the provisions of the
Companies Act, 1956, pursuant to the BSE (Corporatisation and Demutualisation) Scheme, 2005 notified
by the Securities and Exchange Board of India (SEBI). With demutualisation, BSE has two of world's best
exchanges, Deutsche Börse and Singapore Exchange, as its strategic partners.

Over the past 133 years, BSE has facilitated the growth of the Indian corporate sector by providing it with
an efficient access to resources. There is perhaps no major corporate in India which has not sourced
BSE's services in raising resources from the capital market.

Today, BSE is the world's number 1 exchange in terms of the number of listed companies and the world's
5th in transaction numbers. The market capitalization as on December 31, 2007 stood at USD 1.79 trillion
. An investor can choose from more than 4,700 listed companies, which for easy reference, are classified
into A, B, S, T and Z groups.

The BSE Index, SENSEX, is India's first stock market index that enjoys an iconic stature , and is tracked
worldwide. It is an index of 30 stocks representing 12 major sectors. The SENSEX is constructed on a
'free-float' methodology, and is sensitive to market sentiments and market realities. Apart from the
SENSEX, BSE offers 21 indices, including 12 sectoral indices. BSE has entered into an index cooperation
agreement with Deutsche Börse. This agreement has made SENSEX and other BSE indices available to
investors in Europe and America. Moreover, Barclays Global Investors (BGI), the global leader in ETFs
through its iShares® brand, has created the 'iShares® BSE SENSEX India Tracker' which tracks the
SENSEX. The ETF enables investors in Hong Kong to take an exposure to the Indian equity market.

The first Exchange Traded Fund (ETF) on SENSEX, called "SPIcE" is listed on BSE. It brings to the
investors a trading tool that can be easily used for the purposes of investment, trading, hedging and
arbitrage. SPIcE allows small investors to take a long-term view of the market.

BSE provides an efficient and transparent market for trading in equity, debt instruments and derivatives. It
has a nation-wide reach with a presence in more than 359 cities and towns of India. BSE has always
been at par with the international standards. The systems and processes are designed to safeguard
market integrity and enhance transparency in operations. BSE is the first exchange in India and the
second in the world to obtain an ISO 9001:2000 certification.

BSE continues to innovate. In recent times, it has become the first national level stock exchange to
launch its website in Gujarati and Hindi to reach out to a larger number of investors. It has successfully
launched a reporting platform for corporate bonds in India christened the ICDM or Indian Corporate Debt
Market and a unique ticker-cum-screen aptly named 'BSE Broadcast' which enables information
dissemination to the common man on the street.

In 2006, BSE launched the Directors Database and ICERS (Indian Corporate Electronic Reporting
System) to facilitate information flow and increase transparency in the Indian capital market. While the
Directors Database provides a single-point access to information on the boards of directors of listed
companies, the ICERS facilitates the corporates in sharing with BSE their corporate announcements.
History of Futures Trading
The trading of commodities has begun centuries ago, with the first signs of civilization. The
modern type of futures trading marked its presence in 18th, according to some 17th, century in
Japan and in Holland or grains such as rice and wheat.

The organized way of futures trading, with well formed contracts, started in Chicago, USA in
early 1840s. The first centralized futures trading market, the Board of Trade of the City of
Chicago, was established in 1948. This board has standardized the terms, delivery time and the
quantity per contract of the futures. The product traded, until 1970s, through futures markets
include agricultural commodities (wheat, rice, oats, etc), metals (silver, gold, etc) and energy
products (crude oil, natural gas, etc).

The Chicago Mercantile Exchange (CME), established in 1919, introduced financial futures for
the first time in 1971 with the abolition of currency gold standards. Now financial futures are the
most traded type of all futures and it also paved the path for other futures types like interest
futures and index futures. In 1987, again CME, introduced electronic trading for futures, which
have revolutionized the futures trading practice with the global access.