Evolution Of The Stock Market With The Help Of Technology

We all know that modern technology has a powerful influence on every aspect of our life. Technology impacts businesses, health care, education, and social lives and significantly influences modern-day intraday trading. Nowadays, suppose someone wants to become a successful trader. In that case, he has to be well acquainted with the technology because modern traders and investors can quickly realize how technology plays an essential role in the stock market. 

In the past, the procedure of trade intraday was utterly different. At that time, traders gathered around the stock trading area and shouted for their orders. The orders were bought and sold physically on the floor of a stock exchange. The use of technology started with the help of the telephone. Then the introduction of computers in the early 90s with the help of technology was the major invention, and the rest is history. 

The stock market has wholly revolutionized itself with the help of technological developments in different areas and the best trading apps in India. India’s leading stock exchanges, i.e., The Bombay Stock Exchange and National Stock Exchange, are entirely electronically materialized exchanges. 

Impact of Modern Technology on Stock Trading:

The main objective of the stock market is to allocate capital and resources efficiently so that companies and shareholders can earn huge profits through trading India. Though modern stock traders have unlimited access to advanced tools like high-frequency trading, artificial intelligence, trading algorithms, etc., they should always remember the trading objectives. Following are some of the most common technology trends that are responsible for the transformation of modern-day investment.

  1. Importance of Electronic Stock Exchange:

Previously trading in India was held on the crowded floors of stock exchanges like in all other countries. In 1971, the first-ever electronic stock market was launched by NASDAQ. To allow small investors to start low-volume trades through electronic stock exchanges, NASDAQ established a small order execution system in 1984. After that, BSE and NSE also started their electronic channels for trading in India.

  1. Online Trading:

Electronic trading has solved many problems for traders. Now, with the emergence of online trading, the role of a broker has wholly changed. Previously, investors had to call a broker or financial advisor before placing orders. But now, with the help of online trading platforms, brokers can easily connect with individual investors. Traders can easily find information related to current F&O stocks prices, and they can do direct buying and selling through these platforms. 

  1. Introduction of Big Data Analytics:

Analyzing a large volume of data is essential for managing and regulating financial markets. The Securities and Exchange Commission uses big data analytics to monitor market activities and prevent illegal trading. Big banks, hedge funds, and retail investors also use big data for predictive analytics and portfolio risk management.

It is clear that technology has become a significant part of the stock market nowadays. Due to the advancement of technology, investors are now utilizing different algorithms for trading, using big data for research, and using Robo-advisors to get the best investment tips. These are all benefits of using modern technology but some drawbacks. Firstly, it can affect investment due to a lack of human interaction. Secondly, there is a privacy concern and risk of financial loss because of hacking and several fraud activities.


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