Posted on 03/23/2020 7:13:02 AM PDT by Kaslin
Today, for the first time in 228 years of being open, the New York Stock Exchange (NYSE) opens for trading without traders on its floor. While necessary in the interest of public health, some have argued that continuing technological progress, highlighted by greater online emphasis during the Coronavirus Pandemic, has rendered the famous NYSE trading floor obsolete. Those detractors could not be more wrong as there are very real national and human reasons for keeping the trading floor open once it is safe to do so.
The New York Stock Exchange is a part of our national fabric. The opening and closing bells, with the traders on the floor in between, are as much a part of our national day as Reveille and Retreat are for the military. Different professions, but both deeply in love with the same special country.
The floor is a place where young people have grown up, where generations continue the work of their grandfathers, and often working with their grandfathers. For them, it is more than a job but fun and even a labor of love. When I first toured the floor of the NYSE, I was told of one trader who had been there so long that when a question arose of who was a face in a certain picture or who worked for what company way back when, the NYSE would simply ask that trader. A snooty outsider would call that man outdated but those who work there knew his wisdom. Such institutional knowledge is invaluable and every organization needs its Village Elders.
The floor is a deeply patriotic place and I was humbled to see it twice up close. The first was upon walking through the floor on the morning of the 12th anniversary of the September 11 attacks with a military contingent. The place erupted in cheers, not because of anything we personally had done, but because of the NYSE’s support of the military. Their support went beyond mere cheers and “Thank you for your service.”
Many people on the floor offered me their business cards and, not long after, a call came to me telling me I had been selected to be a part of the NYSE Veteran Associate Program, where veterans would intern at the exchange, receive a small salary and learn the ways of finance and Wall Street. The program was also unique in that the selectees were invariably enlisted, the thinking being that officers already had a leg up in the world. They were willing to take a chance on enlisted service members, despite little financial background by most of us, and believed that enlisted members could learn the job the same way they had in the military. While thankful, I had already been blessed with a full time job and had to turn down the offer. The NYSE Veteran Associate Program was not something I could have taken advantage of, but it was also something I never forgot.
Other than drawing closer to Him and our neighbors, no one fully knows what God is trying to teach us in allowing the coronavirus to happen. However, one of the benefits is seeing that much more work than we ever thought before can be completed from home. This has benefits and drawbacks; the benefits allowing more flexibility and, if done correctly, more rest and quality time with loved ones. Some individuals are even more productive with a lack of office distractions. Due to technology, much of it generated from the floor of the NYSE, many are able to virtually go to church, have meetings, see their doctor, go to school, and work.
The drawbacks include total reliance on technology, both in the idea of the systems crashing (a virus of its own) and the loss of the human element. History shows that technology unchecked with human input and morality is dangerous.
However online we are now, the truth is most of us still long to get out of the house. We not only long for that personal human contact but we need it. We need someone to look us in the eye, to trade with, admonish us, impart love of country and have compassion on us.
Many places will always need the human touch and the trading floor of the NYSE is one of them. Detractors call the floor a relic of the past but, like that 90-plus-year-old trader who served there for decades, it is anything but.
Nostalgia is not the reason to keep the floor open. I’ve wondered since the 90’s why they bother.
It’s hard to fool around with your secretary when you work at home with your wife.
Bump
To make a short story shorter - tradition is the reason. Not good enough.
You think they might have learned a lesson after 9/11. The NASDAQ is a “virtual” exchange that could have continued operating uninterrupted, but the NYSE was shut down for several weeks after the devastation.
Bull Schiff. The number of traders has been declining for years. The trading floor does little other than facilitate complex trades between institutions. Most of those trades include components that are made behind closed doors and are unknown to the market. The floor traders are not trading shares that you or I buy. The vast majority of trades occur electronically.
I wrote this in another tread yesterday, related to a different story, but it applies here. The value of an exchange (market) is based on capitalistic principals, mainly pure competition. They are 1.) Perfect Price Information. 2.) Perfect Product Information. 3.) Easy Entry into the Market. And 4.) Easy Exit from the Market. Floor traders give floor traders near perfect price information, not the public. If striving for perfect price information, improvements need to be made on computer systems and network latency times. Then everyone has fair and equal price information. (Note, if you have enough cash, you can co-locate your servers with the exchange servers, it improves your price information.) Perfect product information exists, if you define it as knowing what different types of securities are and how they work. Financial information about publicly traded companies is not in the purview of an exchange. That has been relegated to government. Ease of entry and exit deals with volume. Floor traders help getting in and out of low volume stocks, but there is a cost to it, and they their take is proportionally large. Solution, relegate low volume securities to different exchanges, and guess what, they are fully electronic.
Getting rid of floor traders is good for the market. Sorry if there are any floor traders on here, and brokers that get better deals because of your floor traders. It democratizes the market. It brings the market closer to pure competition and capitalism. The only thing that can't be changed about the market is that there will always be someone with more money than you, and they can move markets/products, and you cannot. We just have to suck that one up.
You think they might have learned a lesson after 9/11. NYSE did. They moved their trading systems to a warehouse in NJ. Everything is traded electronically. Floor traders facilitate complex trades that the computers can’t handle.
Only down 523 to 18,650 not bad I was expecting far worse.
Yeah, sort of like that, but even commodities are traded electronically now and FCOJ is not longer traded. The market is too small. Pork bellies too, gone by the wayside.
Down 818 now.
I was joking, I know what you mean by complex trades.
Think big, think positive, never show any sign of weakness. Always go for the throat. Buy low, sell high. Fear? That’s the other guy’s problem. Nothing you have ever experienced will prepare you for the absolute carnage you are about to witness. Super Bowl, World Series - they don’t know what pressure is. In this building, it’s either kill or be killed. You make no friends in the pits and you take no prisoners. One minute you’re up half a million in soybeans and the next, boom, your kids don’t go to college and they’ve repossessed your Bentley. Are you with me?
Yeah, we got to kill the motherf... - we got to kill ‘em!
I knew you were joking, too. I’m just a bit left-brained on Monday mornings.
Gone are the days of knee-deep paper, hand signals, whistles, jostling runners and broker reps, the DK desk....I guess even the pneumatic system is gone.
I used to be a teletypewriter repairman and hated having to work on the floor. Drop a small tool or part and it went to a different dimension.
Big rally only down 315 now
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.