Happy Birthday, Stock Ticker: You Made Buying and Selling Inhuman
Right now in the space of a few clicks, I as just some jerkoff with a checking account and poor judgement, could purchase shares in the likelihood that the US or Israel will attack Iran before the end of the year on InTrade. After another cup of coffee...
Right now in the space of a few clicks, I, just some jerkoff with a checking account and poor judgement, could purchase shares via InTrade in the likelihood that the US or Israel will attack Iran before the end of the year. After another cup of coffee, I might decide to sell those shares and buy some shares in General Motors (both are selling in the $23 range) and maybe a few of Facebook’s, just for a laugh. And this would represent the actually sane, quaint part of stock trading in the year 2012.
My clicking finger could never keep up with the microsecond trading that makes up roughly half of the stock market now, piloted by computer programs that could give a shit less what a Facebook even is. So not stock traders making weird hand gestures or even goofballs like me, but software buying and selling in microseconds, making tiny gains that add up to theoretically big returns by virtue of their high-frequency. Though, software trading is perhaps already peaking in a brutal technological arms race where every sliver of a second is less a battle won than a gasp of air. Techno-supremacy in the stock market is a land of diminishing returns, but the war goes on. It’s pretty stupid.
Once upon a time, stock trades were made with the help of mail or messengers. A guy on a horse would show up with some numbers; a few days later you might send some money back to the exchange via another guy on a horse. Maybe that same guy would bring you back a fancy certificate of ownership. The whole process could take several days! Maybe longer?
That’s a weird thought now: buying stock implying some sort of commitment. Then, on this day in 1867, came along what became known as the stock ticker. This was the work of Edward Calahan, who took a telegraph machine and reconfigured it to print out stock quotes on long strips of paper. That same stock exchange could now communicate with you in seconds. Two years later, Thomas Edison came up with a more user-friendly version and made himself rich selling the things. This is how the inventor financed his Menlo Park lab.
Turns out the telegraph was destined to die off pretty quickly, a victim of its grandchild, the telephone. But the paper stock ticker actually stuck around until the ’60s, when electronic tickers took over — most famously, those quick-scrolling LED things — and, soon enough, computers and eventually software. Right now, in the interest of killing latency dead and making those split-second automated trades even faster, firms are ditching fiber-optics for their own networks of microwave transmission towers to the tune of hundreds of millions of dollars.
So Calahan really had no idea what fast trading even meant: inhumanly fast. In the years since 1867, it’s become fast enough to make a joke of the whole idea. Which, if we’re going to put any value on said of buying and selling shares of the other’s commercial endeavors, we’re better off with horses.
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