Making the floor more integral, not less

By: Ray Pellecchia

File Under: NYSE

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Next to Downsize on Wall Street? The Exchange Floor (NYTimes.com) -- Excerpt:
Today, what happens on the 104-year-old trading floor on Wall Street accounts for only one-tenth of the revenue of the company, now known as NYSE Euronext.
But exchange officials said that they were revamping their operations to make the floor more integral, not less. The opportunity to have people rather than computers make decisions on a customer’s trade distinguishes the exchange from its all-electronic competitors like the Nasdaq stock market, they said.
We intend to have the floor as part of our market model as far as we can see out into the future,” said Duncan L. Niederauer, the president of NYSE Euronext. “There are certain things that computers can’t do.”
Mr. Niederauer said he could not predict how much of the trading would ultimately occur there, but he said he did not foresee further shrinkage of the floor. “I don’t see it getting a lot smaller than that,” he said, referring to the two rooms that will be left after November.

There were a couple of video reports on the same subject last weekend:

Human Traders Not Easily Defeated (TheStreet.com) --
As electronic trading grows in popularity, the need for human-based floor trading shrinks. But don't write the obit for human traders just yet.

The Incredible Shrinking Trading Floor (TheStreet.com)--
The NYSE's decision to close two trading rooms leaves a bad taste in the mouths of NYX shareholders and floor brokers alike.

NYSE Reports Record First-Hour Volume Sept. 21 (NYSE.com) -- Last Friday's expirations and rebalancings contributed to record trading volume in the first half-hour and hour of trading. I actually wrote this up on Friday at 10:30 a.m., following up on a tip from a friend (yes, I have friends), somehow didn't hit the "publish" button and didn't look at the blog again until just now to see my error of omission. Idiot. Note to self: slow down and quit being an idiot.

Today in NYSE History (NYSE.com)
23 Sept. 1933 -- The New Jersey Stock Exchange was created as the NYSE planned to move operations to Newark in order to avoid a city stock-transfer tax. The tax was dropped and the NYSE stayed put.

Hold the Jersey jokes; it's where I was born and raised. The NJSE idea rose again in the 1990s when NYSE was looking for a place to expand. The result was the same -- we stayed put -- and looking back on it, obviously that was for the best.

24 Sept. 1869 -- Black Friday: Jay Cooke and Jim Fiske tried to corner the gold market, setting off a financial panic.

Tags: New York Stock Exchange, NYSE, NYSE Euronext, NYX, Standard & Poor's, options futures, trading volume, specialists, floor brokers, trading floor, Panic of 1869