The history of the earliest stock exchange, the French stock exchange, may be traced back to 12th century when transactions occurred in commercial bills of exchange. To control this budding market, Phillip, the Fair, of France (1268-1314) created the profession of couratier de change, which was the predecessor of the French stockbroker. At about the same time, in Bruges (a prosperous centre of the low countries of Europe), merchants began gathering in front of the house of the Van Der Buerse family to engage in trading. Soon the name of the family became identified with trading and in time a 'bourse' came to signify a stock exchange.

More roots of stock markets are to be found at the beginning of the Industrial Revolution that began in Europe about four centuries ago. Many of the pioneer merchants of the industrial age wanted to start huge businesses, which no single merchant could raise alone. It therefore became inevitable for them to come together, pool their savings andstart these businesses as partners or co-owners. The contribution of each partner to the enterprise was to be represented by a unit of ownership. This was the precursor to what we call shares. And through this, 'joint stock' companies were born.

Initially, trading in shares began as informal “hawking” in the streets of London. As the volume of shares increased with more companies floating shares (giving people opportunities to buy their shares), the need for an organized marketplace for the exchange of these shares escalated. As a result, these traders decided to be meeting at a coffeehouse, which they used as the marketplace. Eventually, they took over the coffeehouse and changed its name to 'stock exchange'.

This was in the year 1773, and the first stock exchange, the London Stock Exchange, was founded. Wall Street can trace its name back to 1653. Originally it was set up for defense and not for commerce. Settlers of Dutch descent, who were always on the lookout from attacks by Native Americans and the British built a 12 foot stockade fence. Little did they know that this fence would go on to become the center of financial activity in the world. The wall lasted a good while, until 1685. At that point the wall was torn down and a new street was built. The British called it Wall Street.

The year was 1790. The place was Philadelphia. The occasion was the founding of the first stock exchange in America. Two years later a group of New York merchants met to discuss how to take command of the securities business. The merchants, a group of 24 men, founded what is now known as the New York Stock Exchange. But in early 1817, the merchant group from New York, distressed at the sorry state of their stock exchange, sent a representative to Philadelphia to observe how things were being done. Upon arriving with news about the robust exchange in Philadelphia, the New York Stock and Exchange Board was soon formally organized.

Other European exchanges that opened in the 1600s and 1700s included those in Belgium, Spain, Portugal, and Sweden.