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Industry study 24 of 24 · Trading and Options Research Companion

History of Trading from Dojima Rice to 0DTE

~7,000 words

Trading is older than the stock market, and options are older than the theory that prices them. The instruments in this knowledge base were mostly invented before anyone could value them; the theory arrived later, and the technology arrived last. The milestones in brief:

What the study covers

  1. 1Overview: instruments first, theory second, technology last
  2. 2Amsterdam, 1602–1700: shares, forwards and options before the stock market
  3. 3Dojima, 1697–1939: the first organised futures market
  4. 4Chicago, 1848–1970: grain, the pits and the clearing house
  5. 5Bucket shops, Livermore and the first crowd of retail speculators (1880s–1920s)
  6. 6Bachelier, 1900: the random walk and the first option-pricing theory
  7. 7, the New Deal and the rules that still frame trading (1929–1940)
  8. 8Thorp and the first quants (1960s)
  9. 9–1973: currency futures, the Cboe and Black–Scholes
  10. 10Index futures, portfolio insurance and 1987
  11. 11The quants and LTCM (1980s–1998)
  12. 12Electronic trading and decimalisation (1990s–2005)
  13. 13High-frequency trading and its crises (2005–2015)
  14. 14The retail revolution: discount brokers to zero commissions (1975–2021)
  15. 15Volatility as an asset, and its first crash (1993–2018)
  16. 16DTE, record volumes and the 24-hour market (2022–2026)
  17. 17Europe and Asia
  18. 18What has stayed constant
  19. 19Timeline
  20. 20How to read historical trading claims
  21. 21Key numbers
  22. 22Landmark firms and cases
  23. 23Pitfalls
  24. 24How an expert thinks about it
  25. 25Glossary

Companies in this study