What "happens" on the stock exchange trading floors?

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ResearchMed
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What "happens" on the stock exchange trading floors?

Post by ResearchMed » Wed Mar 18, 2020 7:01 am

What is it, exactly, that is happening ON the stock exchange trading floors?
It's no longer the pits and traders yelling/screaming, flailing around with pieces of paper and bids/offers (IF that is even a reasonable description of the good ole' days).

So what IS happening that isn't covered by electronic exchanges?
What are they doing that can't be (isn't being?) done by sort of wizards sitting behind curtains, given the high tech nature of "the markets"?
This could obviously include some actual humans, but do they [all? some?] need to be uniformed and in full view during "market hours"?

I'm assuming that this isn't all "dress up" and "make work"...?

Can "the markets" operate entirely electronically?
(Like, maybe, during a more serious, more comprehensive quarantine/isolation situation?
Asking for a friend... :wink: )

Seriously, I've been wondering anyway, but current events make the curiosity a bit more relevant.
Do the traders/others on the exchange floor need to be there for "the markets" to function?

RM
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alex_686
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Re: What "happens" on the stock exchange trading floors?

Post by alex_686 » Wed Mar 18, 2020 7:05 am

No, they can’t.

In my 30 person fixed-income team 1 person had to be in the office. And the server people as well but I don’t know where they are - a different state I think?

On a more serious note, being able to stand up and talk with your cohorts helps.

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Re: What "happens" on the stock exchange trading floors?

Post by ResearchMed » Wed Mar 18, 2020 4:05 pm

alex_686 wrote:
Wed Mar 18, 2020 7:05 am
No, they can’t.

In my 30 person fixed-income team 1 person had to be in the office. And the server people as well but I don’t know where they are - a different state I think?

On a more serious note, being able to stand up and talk with your cohorts helps.
Your "office" is right on an exchange (e.g., NYSE) trading floor?

I'm not unfamiliar with many of the advantages of being "with/nearby" colleagues, etc.
That's not what I'm asking. And I didn't intend to imply questioning whether there need to be "humans" who are overseeing the technology/equipment (HW and SW).
(And "server people in another state" seems to suggest that everyone in full sight right there on the exchange floors does *not* actually need to physically be present ON the exchange floor...?)

I'm asking about the basic *functioning* of the exchanges - what *happens* ON the exchange floor.
Are the people there really/still performing an essential function now that those pits no longer exist (or do they!?), and so much is electronic. Or could "the markets" continue to operate without those people right on the exchange floor itself?

ETA: Okay, having people ON the exchange trading floor is *not* necessary.

The NYSE is CLOSING the floor operations:

https://www.cnbc.com/2020/03/18/nyse-to ... virus.html

But I still would like to understand what IS done "on the floor".
Anyone?

RM
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alex_686
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Re: What "happens" on the stock exchange trading floors?

Post by alex_686 » Wed Mar 18, 2020 4:11 pm

ResearchMed wrote:
Wed Mar 18, 2020 4:05 pm
Your "office" is right on an exchange (e.g., NYSE) trading floor?
Nope - nowhere near. I am trying to remember if the fixed income even has a trading floor anymore. Or ever had one. Most of the business has either been over-the-counter or over electronic exchanges.

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Re: What "happens" on the stock exchange trading floors?

Post by ResearchMed » Wed Mar 18, 2020 4:33 pm

alex_686 wrote:
Wed Mar 18, 2020 4:11 pm
ResearchMed wrote:
Wed Mar 18, 2020 4:05 pm
Your "office" is right on an exchange (e.g., NYSE) trading floor?
Nope - nowhere near. I am trying to remember if the fixed income even has a trading floor anymore. Or ever had one. Most of the business has either been over-the-counter or over electronic exchanges.
Did you read my original question?

It began with: "What is it, exactly, that is happening ON the stock exchange trading floors?"
Just like the Subject Header.

???

It did not refer to all of the various things that do NOT occur on an exchange trading floor.

ETA: Oh, and apparently, per the link I posted, it *IS* possible for the "people" to be elsewhere.
This was why I was asking, but I obviously didn't know it would be actually happening - and quite so soon!

RM
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Re: What "happens" on the stock exchange trading floors?

Post by ResearchMed » Sun Mar 22, 2020 9:24 pm

ResearchMed wrote:
Wed Mar 18, 2020 7:01 am
What is it, exactly, that is happening ON the stock exchange trading floors?
It's no longer the pits and traders yelling/screaming, flailing around with pieces of paper and bids/offers (IF that is even a reasonable description of the good ole' days).

So what IS happening that isn't covered by electronic exchanges?
What are they doing that can't be (isn't being?) done by sort of wizards sitting behind curtains, given the high tech nature of "the markets"?
This could obviously include some actual humans, but do they [all? some?] need to be uniformed and in full view during "market hours"?

I'm assuming that this isn't all "dress up" and "make work"...?

Can "the markets" operate entirely electronically?
(Like, maybe, during a more serious, more comprehensive quarantine/isolation situation?
Asking for a friend... :wink: )

Seriously, I've been wondering anyway, but current events make the curiosity a bit more relevant.
Do the traders/others on the exchange floor need to be there for "the markets" to function?

RM
The NYSE is CLOSING the floor operations, starting tomorrow:

https://www.cnbc.com/2020/03/18/nyse-to ... virus.html

But I still would like to understand what IS (or "was"!) done "on the floor".
And now that they are closing the trading floor, is there anything that "could happen last week" that cannot happen in the coming week?

Anyone?

Many thanks!

RM

ETA to fix link
Last edited by ResearchMed on Sun Mar 22, 2020 10:11 pm, edited 1 time in total.
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Scooter57
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Re: What "happens" on the stock exchange trading floors?

Post by Scooter57 » Sun Mar 22, 2020 9:52 pm

Apparently a lot, if not all of it, was for tourists and to give a backdrop for cable TV investing shows. Oh, and to have a place wherec guys from IPOs and other celebrities could ring a bell now and then.

It has become a piece of theater to a put human face on what is actually a huge network of computers interacting with each other. Years ago it really was a floor full of guys with enormous stamina yelling at each other to complete trades. Trades cost serious big bucks back then, too, because it was done by real people, not high speed computers.

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Re: What "happens" on the stock exchange trading floors?

Post by Stinky » Mon Mar 23, 2020 8:52 am

Scooter57 wrote:
Sun Mar 22, 2020 9:52 pm
Apparently a lot, if not all of it, was for tourists and to give a backdrop for cable TV investing shows. Oh, and to have a place wherec guys from IPOs and other celebrities could ring a bell now and then.

It has become a piece of theater to a put human face on what is actually a huge network of computers interacting with each other. Years ago it really was a floor full of guys with enormous stamina yelling at each other to complete trades. Trades cost serious big bucks back then, too, because it was done by real people, not high speed computers.
+1

I visited the floor of the Exchange about five years ago, and that's definitely the impression that I had.
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Re: What "happens" on the stock exchange trading floors?

Post by skepticalobserver » Mon Mar 23, 2020 9:22 am

Most trading is done electronically. Over the weekend I read that NYSE floor traders pick-up human-to-human info and pass it on to clients for an “edge.” Best I can tell floor activity was highly valued as CNBC backdrop and NYSE publicity.

The $2 broker died long ago.

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Re: What "happens" on the stock exchange trading floors?

Post by Forester » Mon Mar 23, 2020 10:00 am

ResearchMed wrote:
Wed Mar 18, 2020 7:01 am
What is it, exactly, that is happening ON the stock exchange trading floors?
It's no longer the pits and traders yelling/screaming, flailing around with pieces of paper and bids/offers (IF that is even a reasonable description of the good ole' days).

So what IS happening that isn't covered by electronic exchanges?
What are they doing that can't be (isn't being?) done by sort of wizards sitting behind curtains, given the high tech nature of "the markets"?
This could obviously include some actual humans, but do they [all? some?] need to be uniformed and in full view during "market hours"?

I'm assuming that this isn't all "dress up" and "make work"...?

Can "the markets" operate entirely electronically?
(Like, maybe, during a more serious, more comprehensive quarantine/isolation situation?
Asking for a friend... :wink: )

Seriously, I've been wondering anyway, but current events make the curiosity a bit more relevant.
Do the traders/others on the exchange floor need to be there for "the markets" to function?

RM
The floor traders are Hollywood actors who appear on the front page of Drudge when needed.

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tooluser
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Re: What "happens" on the stock exchange trading floors?

Post by tooluser » Mon Mar 23, 2020 8:06 pm

This video shows how it used to be done.
https://www.youtube.com/watch?v=_eUyncPC_mI

Spoiler don't read any further I warned you - Pit the card game is a viable simulation of actual stock exchange pit trading in the 20th century. Oh how my parents hated that game.

This article from a couple of years ago is probably more informative.
https://qz.com/1078602/why-the-new-york ... ing-floor/

Also good from the WSJ, but 4 years old. Technology continues to advance.
https://www.youtube.com/watch?v=aluuekJIhWI

It used to be a place to make trades between people who represent people who represent other people and organizations, not machines.

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Re: What "happens" on the stock exchange trading floors?

Post by Quercus Palustris » Thu Mar 26, 2020 11:56 am

Reuters: 'Most photographed' NYSE trader contracts coronavirus
I was wondering what market news outlets were going to do without access to Worried Trader / Joyful Trader photos. How will I know if the S&P is up or down :confused .

Hope he makes a quick recovery -- and same for everyone else who's gotten exposed.

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