Since the turn of the 21st century and the widening of access to the stock market, thanks to the development of online trading, individual investors have been offered a multitude of tools, such as the Robinhood platform in the United States. -United, to take part in this phenomenon. The trend has also accelerated since the start of the Covid-19 pandemic, which has given rise to new vocations among many amateur investors, driven by the prospect of taking advantage of sharply falling prices to enter the stock market. The latter, a traditional object of interest for this type of investor, is today joined by Forex and the cryptocurrency market, which are experiencing increasing success.
A democratization that goes in the direction of history
The appearance of the first institutionalized stock exchanges dates from the 17th and 18th centuries in industrialized countries. The Amsterdam Stock Exchange was inaugurated in 1611, in the heart of a city which constituted one of the cradles of modern capitalism, at a time when the activities of the young Dutch East India Company required the drainage of a significant quantity of capital, thus giving pride of place to the equity, commodity and currency markets. This was followed by the Paris Stock Exchange, created in 1724, and that of London in 1776. Across the Atlantic, the first American Stock Exchange was founded in Philadelphia in 1790; that of New York was born two years later, in 1792.
For most of the next two centuries, activity in stock markets remained confined to a relatively small number of users. Indeed, the latter must use brokers , financial intermediaries who carry out transactions on a market on behalf of their clients (buyers or sellers). In return, the broker is remunerated through a commission taken from the transaction executed. The profession is as old as the stock exchanges themselves and aims to fill the lack of knowledge of clients who have the need or desire to use the markets to finance or enrich themselves, which is why the brokeroften also has an investment advisory role for its client, a service usually provided by banks to their clients wishing to invest their savings. Until the end of the 20th century, the necessary physical presence of the broker on the Stock Exchange to be able to execute the transaction mechanically limited the number of operations that could be carried out and made active trading a service that was difficult to access for uninitiated individuals.
A major revolution occurred in the 1970s and 1980s, marked by the computerization of stock quotes, while the volume of transactions increased in the context of financial globalization and concentration of world stock markets. In other words, this change results in the disappearance of paper in stock market transactions, in favor of the new computer tool.
It is in the wake of this phenomenon that the automation of transactions took place, in the 1980s and 1990s, with the gradual abandonment of auction sales, a traditional auction system in which the seller, physically present in the Stock Exchange, calls out loud to potential buyers in order to sell their financial security at the best price. The auction still continues in certain stock exchanges, on an essentially symbolic basis, such as at the NYSE in New York. In any case, automation, supported by IT dematerialization, makes it possible to relocate investment decision-making on the market and thus opens Pandora’s box of access to trading for uninitiated populations.
Indeed, the widespread development of the Internet in the 2000s initiated a broad movement of democratization of access to trading for individuals, not only on stocks, but also on other assets such as currencies, traded on the Forex. The 2010s finally saw the expansion of trading in cryptocurrencies, dematerialized and decentralized assets that rely on blockchain technology .