The only way you would not know what is happening in the world of stock markets around the world is if you lived under a literal rock. The news of stocks tumbling, markets crashing, and economists sounding the 'recession' alarm has been on top of everyone's feed.

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This latest crisis was triggered by US President Donald Trump's announcement of sweeping tariffs ranging from 10-49 per cent on almost all countries and even lands habituated by penguins and seals (you can catch up on everything with WION's coverage).

But before we get caught up in headlines, it’s worth taking a step back to ask: Where did all this begin?

The beginning of stock trading

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The stock market goes way back to the 1500s, but things kicked off in 1602 with the birth of the Amsterdam Stock Exchange, which is still running today. This was when the idea of publicly trading company shares took shape.

At the centre of it all was the Dutch East India Company, also known as the VOC (short for its Dutch name). The VOC was a powerful trading company set up by the Dutch government, mostly known for shipping spices and goods from Asia, including India, to Europe.

The India connection

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India played a big role in the VOC’s success. The company set up trading posts across the country, in places like Masulipatnam, Surat, Cochin, and Patna, and dealt mainly in spices. This trade brought in massive profits and helped fund the company’s far-reaching voyages.

World’s First IPO

To fund its large-scale trade missions and ambitious plans, the VOC came up with a clever idea: they held the world’s first Initial Public Offering (IPO) in August 1602.

It was a game-changer. For the first time ever, a company publicly invited everyone, not just a few rich elites, to invest and become shareholders. The VOC’s founding charter stated: “All the residents of these lands may buy shares in this Company.” There was no fixed amount, you could invest as much or as little as you liked.

Because they didn’t have a formal office, investors were asked to visit the private home of Dirck van Os, a wealthy merchant and co-founder of VOC, to put in their money. He and the other directors oversaw the registrations personally.

The birth of stock trading: How did tradable shares come into picture?

Soon, they realised that asking investors to keep their money tied up for a full ten years might not go down too well. So, a new clause was added to allow shares to be transferred, or sold, to someone else.

This meant investors didn’t have to wait years to get their money back. They could simply sell their shares. It was the birth of tradable shares. The process was quite formal: shareholders had to visit the bookkeeper and get the approval of two directors. Every transfer was carefully noted in a special register.

By the end of August 1602, when the IPO closed, 1,143 investors had subscribed to VOC’s Amsterdam branch.

Building for business: Amsterdam Stock Exchange and India's role in it

In 1611, stock trading got its own address, the Amsterdam Stock Exchange moved into a purpose-built structure called the Beurs van Hendrick de Keyser. This became the heart of trading activity, with “verkoopmans” or brokers helping buyers and sellers complete deals.

While the Amsterdam Stock Exchange was based in Europe, India played a major role in its success. VOC’s trading posts in India were key to its profits. Spices from Indian ports were in huge demand in Europe, and these trade routes helped the company grow and attracted investors, even from Asia.

Some Indian investors also took part, drawn by the profitable spice trade. This helped incorporate India into the fabric of global financial history, as its goods and ports helped fuel VOC’s booming business and, in turn, the world’s first stock market.

Did people use shorting tricks even back then?

Even in those early days, people were playing smart in the markets. Traders didn’t just buy and hold, they also bet on shares going down. This is called “shorting.” You borrow shares, sell them, and then buy them back at a lower price to make a profit.

And without real-time news like we have today, there were rumours galore. Some merchants would spread lies, like a VOC ship sinking, just to drop the stock price and make money.

If that sounds familiar, you’ve probably seen similar things play out in modern times. Let’s say, for example, a powerful businessman wanted to buy a social media platform on the cheap. They might start talking down the value of a platform, let’s call it Quitter, on the very same site, hoping to crash the price before making a move.