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Stock market data systems communicated market data—information about securities and stock trades—from stock exchanges to stockbrokers and stock traders.

HistoryEdit

The earliest stock exchanges were in France in the 12th century and in Bruges and Italy in the 13th. Presumably data about trades in those times was written down by scribes and traveled by courier. In the early 19th century Reuters sent data by carrier pigeons between Germany and Belgium[1] In London early exchanges were located near coffee houses[2] which may have played a part in trading.

Chalk boardsEdit

In late 1860s New York, young men called “runners” carried prices between the exchange and broker’s offices, and often these prices were posted by hand on large chalk boards in the offices.[3]

The New York Stock Exchange is known as the "Big Board", perhaps because of these large chalk boards. Until recently, in some countries such chalkboards continued in use. Morse code was used in Chicago until 1967 for traders to send data to clerks called "board markers".[4]

NewspapersEdit

From 1797 to 1811 in the United States, the New York Price Current was first published. It was apparently the first newspaper to publish stock prices, and also showed prices of various commodities.

In 1884 the Dow Jones company published the first stock market averages, and in 1889 the first issue of the Wall Street Journal appeared. As time passed, other newspapers added market pages.[5] The New York Times was first published in 1851, and added stock market tables at a later date.

Electronic systemsEdit

Ticker tapeEdit

See the main article: Ticker Tape

In 1863 Edward A. Calahan of the American Telegraph Company invented a stock telegraph printing instrument which allowed data on stocks, bonds, and commodities to be sent directly from exchanges to broker offices around the country. It printed the data on 0.75 inches (Template:HidScript error cm) wide paper tape wound on large reels. The sound it made while printing earned it the name "stock ticker". Other inventors improved on this device, and ultimately Thomas Edison patented a "universal stock ticker", selling over 5,000 in the late 19th century.[3]

In the early 20th century Western Union acquired rights to an improved ticker which could deal with the increasing volume of stocks sold per day.[3]

At the time of the stock market crash in October, 1929, trading volumes were so high that the tickers fell behind, contributing to the panic. In the 1930s the New York Quotation Stock Ticker became widely used. A further improvement was in place in 1960.[3]

In 1923 Trans Lux Corporation delivered a rear projection system which projected the moving ticker onto a screen where all in a brokerage office could see it. It was a great success, and by 1949 there were more than 1400 stock-ticker projectors in the U.S. and another 200 in Canada. In 1959 they started shipping a Trans-Video system called CCTV which gave a customer a small video desk monitor where he could monitor the tickers.[6]

Competition, including Ultronics' Lectrscan electron wall system, led Trans-Lux to introduce the Trans-Luix Jet. Jets of air controlled lighted disks which moved on a belt on the broker's wall. Brokers ordered over 1000 units in the first six months, and by the middle of 1969 more than 3000 were in use in the U.S. and Canada.[6]

Automatic quotation boardsEdit

A quotation board is a large vertical electronic display located in a brokerage office, which automatically gives current data on stocks chosen by the local broker. In 1929 the Teleregister Corporation installed the first such display, and by 1964 over 650 brokerage offices had them.

The information included the previous day’s closing price, opening price, high for the day, low for the day, and current price. Teleregister offered data from the New York, American, Midwest, Chicago Mercantile, Commodity, New York Cocoa, New York coffee and sugar, New York Mercantile, New York Produce, New York Cotton, and New Orleans Cotton exchanges, along with the Chicago Board of Trade.[7]

Some firms had a battery of telephone operators seated in front of a Teleregister board to supply commission houses with price and volume data. In 1962 two such batteries handled over 39,000 calls per day.[8]

In 1955 Scantlin Electronics, Inc. introduced a competitive display system very similar in appearance but with digits twice the size of Teleregister’s, fitting into the same board area. It was less expensive and soon was installed in many broker offices.

Stock market quotation systemsEdit

In the late 1950s brokers had become accustomed to several problems doing business with their customers. To make a trade, an investor had to know the current price for the stock. The investor got this from a broker who could find it on his board. If the last trade (or the stock itself) hadn't made it to the board (or there was no board) the broker telegraphed a request for the price to that firm's "wire room" in New York. There, such requests would be forwarded to the floor of the appropriate exchange, where messengers could copy down prices at the locations where those stocks were traded, and telephone answers back to the wire room. Typical elapsed times were between 15 and 30 minutes just to inform the broker.[9]

QuotronEdit

Jack Scantlin of Scantlin Electronics, Inc. (SEI) developed the Quotron I system, consisting of a magnetic tape storage unit that could be sited at a brokerage and Desk Units with a keyboard and printer. The storage unit recorded the data from the ticker line. Brokers could enter the stock symbol on a desk unit. This triggered a backward search on the magnetic tape (which continued recording incoming ticker data). When a transaction was located, the price was sent to the desk unit, which printed it on a tape.

The first Quotron units were installed in 1960, and were an immediate success. By the end of 1961 brokers were leasing Quotrons in some 800 offices, serving some 2,500 desk units across the United States.[9]

Ultronics vs. QuotronEdit

Quotron’s success attracted the attention of Robert S. Sinn, who observed its disadvantages: it could only give a last price. The opening price, high and low for the day, and share volume were not available. His system used a digital computer to read ticker data and track the additional data on a magnetic drum storage unit, also transmitting the data to other magnetic drums in major cities. Local drums sent data to brokerages who would access it through desk units.

Sinn formed Ultronic Systems Corp. in January 1961. By the fall of that year Ultronics installed its first units in New York and Philadelphia, followed by San Francisco and Los Angeles. Ultimately Ultronics and General Telephone (which bought Ultronics in 1967) installed some 10,000 units world-wide.[10]

File:Quotron.jpg

Scantlin Electronics reacted immediately to the Ultronic threat. In early 1962 they began work on their own computer-based system and put it into service in December, 1962. It used four Control Data CDC 160A computers in New York which recorded trading data in magnetic core memory. Major cities hosted Central Office equipment connected to newly designed Quotron II desk units in brokerage offices on which a broker could request, for any stock, price and net change from the opening, or a summary which included highs, lows, and volumes (later SEI added other features like dividends and earnings). The requests went to a Central Office, which condensed and forwarded them to the New York computer. Replies followed the sequence in reverse. The data was transmitted on AT&T's Dataphone high-speed telephone service. In 1963 the new system was accepted by many brokers, and was installed in hundreds of their offices.[9]

At the end of each day, this same system transmitted stock market pages to United Press International, which in turn sold them to its newspaper customers all over the world.

Am-QuoteEdit

In 1964 Teleregister introduced the Am-Quote system[11] with which a broker could enter code numbers into a standard telephone; a second later a pleasant (prerecorded) voice repeated the code numbers and provided the required price information. This system, like Ultronics’, made use of magnetic drums.

Personal computersEdit

In December, 1986, Standard and Poor's introduced the program PC Plus which ran on personal computers and provided timely last, high, low prices and volume information for any stock, thus making "Desk units" obsolete. The personal computer could also provide data on individual customers, summarize trading, show broker address books, and so on.[12]

Over the years other companies wrote personal computer programs in competition with PC Plus, but they all dropped out along the way.

Mobile applicationsEdit

With the growing use of mobile phones as a means of accessing market information, companies have begun producing mobile applications that provide market data in real time to consumers. Such providers include Bloomberg, CarryQuote, and Delta Stream.

See alsoEdit

ReferencesEdit

  1. History of Pigeons
  2. Script error
  3. 3.0 3.1 3.2 3.3 Script error
  4. Loop Tour
  5. [1] History of Business Journalism
  6. 6.0 6.1 Trans-Lux: Biography of a Corporation, by Christine Grenz, 1982, the Trans-Lux Corporation
  7. [2]
  8. http://c0403731.cdn.cloudfiles.rackspacecloud.com/collection/papers/1960/1963_SSMkt_Chapter_06_4.pdf Report of Special Study of Securities Markets, 1963
  9. 9.0 9.1 9.2 Phister, Montgomery, Quotron II: An Early Multiprogrammed Multiprocessor for the Communication of Stock Market Data, Annals of the History of Computing (1989) 11:109-126
  10. Sinn, Robert S., Reminiscences of a Stock Quotation System: The Real Story of Ultronic Systems Corporation, (Feb. 2009) http://www.inductive.com/Ultronic_Systems.pdf
  11. Script error
  12. Conversation with Mitch Abeyta of Standard and Poor's on September 23, 2010.

External linksEdit

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