People have long dreamed of making their fortune on the stock market, but most people didn’t even know where to start. In the mid-20th century, you had to have a stockbroker, and you had to have a substantial sum to invest. Even in the 1970s, all the action happened at broker workstations. Then the Quotron was introduced and everything changed.
The Evolution of Stock Market Data Systems
The stock market dates back to 12th century France and 13th century Italy. Data then would have been recorded by scribes and delivered by courier. In 19th century New York, chalkboards and runners replaced the scribes and couriers. Information was also delivered via newspapers starting as early as the late 18th century. The earliest electronic data form came with the advent of ticker tape in 1863, and this system continued to go through steady improvements. By 1959, the ticker tape was actually viewed through a CCTV that included a small desk monitor.
The 20th century saw more changes in how the ticker was viewed, including the rise of automatic quotation boards. Vertical electronic displays found in brokerage offices, they delivered the most current data. By 1964, these were in more than 650 brokerage offices to improve communication and allow for faster responses to the changing market.
The Problems with These Systems
While all of these systems were effective in some ways, they also shared one flaw. Becoming successful in the stock market requires a prompt response to changes in the market, and these systems all have a delay between the time the brokers receive information and could transmit that data to their customers. Every minute can make a difference in a rapidly moving market, so there was a desire to see this time elapse of 15 to 30 minutes shrink.
Rise of the Quotron
Jack Scantlin developed the Quotron I system in the late 1950s, and the systems were available for sale by 1960. An immediate success, they recorded data from the ticker line and allowed brokers to perform efficient searches on stock information. By the end of 1961, these systems were in more than 800 offices and in use by more than 2,500 brokers around the country. The one downfall of the Quotron was that it only reported information on the last sale.
The Rise of Other Systems
Industries are always looking for improvements, and it’s common to build on the success of one system by creating one that’s even better. The Ultronic took the basic concept of the Quotron and improved it by providing information like opening price, high and low prices during the day and share volume. This system soon eclipsed the Quotron.
In response to the Ultronic, Scantlin Electronics issued the Quotron II. This system used AT&T’s Dataphone high-speed phone service to provide offices with important information including price, net change from opening, volumes and even dividends and earnings. In addition to receiving information, brokers could also send information.
Technology marches forward, and the Quotron would eventually be replaced by personal computers and today’s mobile applications. The world of stock trading is nothing like it was in 12th century France, and the Quotron played a major role in the electronic changes this field has seen. Not only did the Quotron change life for brokers and traders, but it also led a push for faster, more efficient systems that helped give rise to the modern computer.
Herman Copperpot writes on taxation, financial technology, business & commerce, international trade, general technology and other subjects. Those curious about taxation should view the resources and information available at R&G Brenner Income Tax.
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J. Rex Olson is a freelance writer based in the greater metropolitan area of Seattle. He enjoys writing for the sake of writing, and likes to contribute material on a wide range of topics and issues. When not writing he loves playing basketball and taking in a symphony.
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