The history of stock market trading dates back centuries, with the first publicly traded stocks sold by the Dutch East India Company in 1602. This was, in effect, the world’s first IPO, or initial public offering. People could invest in the company by purchasing ownership shares, which were issued in the form of paper certificates on the Amsterdam Stock Exchange, which is still in existence today. Fast-forward 400 years and the stock market underpins our global economy, and the process of buying and selling stocks can be done in a few taps on a smartphone.
Mobile trading
Today, mobile stock trading enables retail investors to exert headline-grabbing influence over the financial markets in a way that would have seemed unfathomable just a short time ago. Developments over the past 50 years have brought us to this point. For example, E*Trade, the world’s first electronic trading platform, was introduced in 1982—well before the internet as we know it existed. Subsequently, TD Ameritrade launched its telephone push-button method of placing quotes and orders in 1988. Though both companies have endured, remaining two of the world’s most popular trading platforms, it required the development of the internet and widespread public internet access to really popularize electronic trading.
The more recent influx of new traders into the markets is attributable to still other technological innovations, namely advancements in mobile telecommunications. The advent of the smartphone has made it possible for anyone with a handset to access the markets without enlisting the help of an expert intermediary.
This direct access to markets was simply unachievable in the past. Historically, the vast majority of trading involved being at a particular place at a particular time to buy stocks, and later it required placing a telephone call to a broker. Today’s mobile trading apps have broken down barriers, inviting a wider pool of people to invest in the stock market.
Benefits of mobile trading
It’s clear that smartphones have allowed a whole new group of people to participate in the stock market. For example, smartphone apps like Robinhood and Ally Invest have made commission-free trading much more accessible—making investing cheaper and tearing down yet another obstacle that has prevented people with lower incomes from accessing the stock market. Stock ownership and income levels are strongly linked in the U.S. A Gallup poll from 2023 found that 84% of people with annual household incomes above $100,000 had invested in the stock market, compared to just 29% of people from households earning less than $40,000 per year. The proliferation of no-fee trading apps can open trading to these individuals on the lower end of the income scale. Many apps also let users buy fractional shares, which make expensive, high-performing blue-chip stocks more available to investors of modest means.
Other common features of mobile trading apps have increased access to the stock market. Many apps include gamification elements and other features that make trading less opaque and more intuitive to understand. The information and analytics available on such apps also let people follow their curiosity and do their own research on stocks, market trends, and macroeconomic conditions. In this way, these apps provide both a way to learn about the stock market and participate in it. Finally, many mobile trading apps are now integrating artificial intelligence (AI) to provide insights, trading bots, and algorithmic trading features that were once only available to professional investors.
Speed is another benefit of mobile trading apps. Providing real-time access to financial markets from any location, trading apps enable users to keep up with markets, no matter what time zone they’re in. Another attraction lies in the instant transactions supported by super-fast balance reloads and withdrawals. Live data access enables traders to track stats and performance analytics, while advanced notification tools can be employed to keep investors abreast of market news, margin calls, and crucial events, 24/7.
Advice and caution for traders
From the investor’s perspective, however, it is important to remember that not all trading apps are created equal. Before investing, novices should conduct research to see which aligns most closely with their preferences and needs.
Additionally, security should be a significant concern, and it’s best to seek out mobile apps integrating the latest encryption and other security technologies. The regulatory approval status of the broker is also important when selecting a trading platform. In the United States, securities exchanges are regulated by the Securities and Exchange Commission (SEC), the federal body responsible for preventing fraud and ensuring fair dealing and disclosure of important market information. Of course, stock market trading is inherently risky, whether trading the old-fashioned way or on a smartphone app. Past performance is no guarantee of future performance, and all trades have the potential to lose money.
A new world of trading Long gone are the days when hours of research were necessary to track investments, with mobile trading platforms enabling investors to absorb information and trade stocks in a few taps and swipes of their screen. Essentially serving as a palm-sized PC, today’s smartphones bring the stock market to people’s fingertips via an ever-growing online trading industry—one that is currently valued at $10.21 billion and grows bigger by the day.