The job of a stockbroker aInd experiences of investors were very different before the internet came into general use. The history of online stock trading started in 1979, when all stock orders were placed personally with a broker. Stock brokers and brokerage firms did use electronic trading systems. In 1969, electronic communications networks were in use by brokerages. Brokerage firms used the systems to track ask and bid prices for stocks, but the information was carefully-guarded. The average investor had no access to this information.

In 1982, the first widely-used system for buying and selling stocks online came into use. NAICO-NET was the first system that allowed trading via computers and an international online network. Costs were high, however, and NACO-NET had a user base of about 5,000 people, primarily brokers and brokerages. By 1985, retail trading became more widespread through Trade*Plus. The Trade*Plus service was offered to investors who used dial-up internet services like Compuserve and America Online. These services were costly on their own, so Trade*Plus expanded online stock trading, but it was still not widespread among investors. William Porter was one of the founders of Trade*Plus, and in 1991, he founded a subsidiary called E*Trade.

As use of the internet, home personal computers, and better communication and data speeds increased, costs of online stock trading decreased, attracting more and more investors. About 20 percent of the U.S. adult population had some investments in the stock market by the 1990s, all due to services like E*Trade and the growing online stock trading industry.

Companies like TD Ameritrade and Charles Schwab developed strong online trading businesses in the mid-1990s. In 1997, Charles Schwab achieved the million customer account level, with total client assets of $437 billion. began offering discount commission services in the later 1990s, taking market share from the other retail firms. In 1994, there were 12 online stock brokerages, and by 2000, there were more than 140. As the history of online stock trading flourished throughout the 2000s, the traditional broker-oriented model began to fade, changing to a consumer model.

Today's online stock trading no longer relies on home computers. Mobile trading is further expanding the business. Companies are building business and market share by offering the best mobile trading platforms, which work on the iPhone, Android phones, and other internet-capable mobile systems. Another way that online stock firms are gaining more market share is offering increased education to investors and greater opportunities to develop their own investment strategy through online stock trading simulators and online stock investment practice.

Author's Bio: 

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