History
Originally, the most important U.S. stocks were traded on the New York Stock Exchange. A trader would contact a stockbroker, who would relay the order to a specialist on the floor of the NYSE. These specialists would each make markets in only a handful of stocks. The specialist would match the purchaser with another broker's seller; write up physical tickets that, once processed, would effectively transfer the stock; and relay the information back to both brokers. Brokerage commissions were fixed at 1% of the amount of the trade, i.e. to purchase $10,000 worth of stock cost the buyer $100 in commissions. (Meaning that to profit trades had to make over 1.010101...% to make any real gain.)
One of the first steps to make day trading of shares potentially profitable was the change in the commission scheme. In 1975, the United States Securities and Exchange Commission (SEC) made fixed commission rates illegal, giving rise to discount brokers offering much reduced commission rates.
Read more about this topic: Day Trading
Famous quotes containing the word history:
“If you look at history you’ll find that no state has been so plagued by its rulers as when power has fallen into the hands of some dabbler in philosophy or literary addict.”
—Desiderius Erasmus (c. 1466–1536)
“The myth of independence from the mother is abandoned in mid- life as women learn new routes around the mother—both the mother without and the mother within. A mid-life daughter may reengage with a mother or put new controls on care and set limits to love. But whatever she does, her child’s history is never finished.”
—Terri Apter (20th century)
“I think that Richard Nixon will go down in history as a true folk hero, who struck a vital blow to the whole diseased concept of the revered image and gave the American virtue of irreverence and skepticism back to the people.”
—William Burroughs (b. 1914)