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For nearly 150 years, a building at the corner of Broad and Wall streets in Lower Manhattan has served as the anchor of the financial world. And, while many of the marquee names on "the Big Board" have changed, the floorshow of the New York Stock Exchange has maintained its rituals. Sure, ticker tape has been replaced by television crawls and the rooms may not be smoke-filled any more, but each day hundreds of men and women hit the trading floor-- the human engines of the global economy. In an era when some wristwatches boast the computing power to run a stock transaction, most deals at the NYSE are made the old fashioned way: by hand signals, hustle, and human ingenuity. But that may be about to change...
New technology and new rules are poised to take much of the trading off the floor and into cyberspace. The potential is high for an historic shift in the culture of high finance.
"The Floor Show" is a Marketplace Special, reported by host David Brown. On Friday, June 11th, Marketplace takes the listener to the floor of the New York Stock Exchange to offer a snapshot of an American institution on the brink of change.
Photo: Stephen Chernin
Getty Images
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 Listen to the Entire Report
"Welcome to the trading floor. I think. This is not at all how it looks on TV. At eye-level, it's like... walking into an old, overcrowded high school gym. The beatup hardwood floor littered with paper scraps. But in front you, what looks like an ancient lunch counter -- only its curved... make your way around it, its almost circular, with a canopy of plasma screen TV's... Push past the crowd, here's another one... must be dozen or more...People in cheap colored smocks are huddled around 'em...or I should say, around the 4 or 5 well dressed guys standing alongside the counters. I assume these are the trading posts. And I assume, the guys in the smart suits are running the show..." |
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Photo: Mario Tama
Getty Images
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"The big dealers, yeah. They've been pushing for the change. Big pension funds too. See they're sitting on huge amounts of stock. They they don't want to wait 10, 20 seconds for a specialist to figure out the best price... They have big lots to move. They see a number on the screen. Hit the button...trade it now. And I promise you that Citibank, JP Morgan, they're all banks now that own brokerage firms, they have all the big pools of capital, they are going to make a fortune. And the public--both institutional and individual, is going to pay thru the nose. Price versus speed...sure. That's one way to think of it. But then the third guy chimes in... the economist..."
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Photo: Stephen Chernin
Getty Images
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" ... When we get to the post, she asks one of those guys in a suit what Fairchild is selling for. There are about six other brokers standing around, in their colored smocks. The guy in the suit is known as the Specialist. He sort of runs the auction. The brokers tell him what they want to buy or sell. He’s also watching a computer screen, where orders from outside the Exchange are coming in. And he’s using all that information to calculate prices, which he yells out to the brokers..."
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Photo: Mario Tama
Getty Images
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"A few weeks ago a broker friend told me, you need to get down to Wall Street soon. He didn't say it in so many words, but I got the sense from him that Wall Street's about to change - and it might never be the same again. And until now, I've avoided going to the floor of the New York Stock Exchange. That Greco-Roman facade always seemed so imposing, so stuffy. Besides, I'd seen it on TV... what more was there to see?"
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