In the very early days of stock market trading, prices, quotes and other stock information was transmitted verbally or by written notice carried by a courier. The inherent problems with this system are evident. One of the biggest is the potential for misinterpreting written information or for the courier to repeat the data incorrectly. Either could lead to some serious problems for the person relying on the information for buying or selling particular stocks.
In the 1870s, the first mechanical means of transmitting information about the stock exchange was invented in the form of a stock ticker. If your business needed to be connected to the stock market for more instant information, you could do so by installing a stock ticker machine and then connecting it to the network of ticker machines.
There were some serious limitations, including the need for wires to transfer the data. There are several evident advantages of a mechanical stock ticker over other forms of communicating stock market information. One of the biggest is the ability to transmit the information over distance. Consider the fact that a typical stock quote is only good for a few hours - a day at most. Sending data by courier meant that the information may very well have been outdated by the time it was received.
The stock ticker was the direct result of the most-recent technology of the day - the telegraph machine. Thomas Edison invented the first ticker machine in 1870 and the technology raced at a speed of about one character per second. George Scott invented the first self-wind ticker machine, though many of the machines were actually manufactured in Thomas Edison's factory.
Consider the early technology in very simplistic terms. At one location, there was a special writer. At another was a receiver - the ticker machine itself. The two were connected by a wire similar to telegraph wire. The writer and receiver communicated via analog signals. The receiver printed out a continuous string of information on a long piece of paper, known as the "ticker." These long strips of paper were often cut into pieces to form confetti, and thrown from windows during parades. As you can see, the technology - at the top of the field at the time - has since become hopelessly outdated.
Today, those who deal in the buying, selling and trading of stocks depend on a far faster and more versatile means of communication - computers and the Internet. In fact, over the past four decades, the stock tickers have become completely obsolete and are no longer used. You sometimes see something very similar to a stock ticker when television stations send text messages across the bottom of your TV screen during news or other programs.
That same idea is being used by some companies who offer modern day stock tickers. Instead of kicking out a continuous strip of paper, these computer programs give you a continuously updating series of stock market data that crawls across the bottom of your desktop. That same principle is used by some companies providing services for individuals or for employees. Data is sometimes transmitted on the recipient's computer or onto a separate display screen.
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