My friend Mike was kind enough to offer me an invitation to tour the floor of the NYSE with him today, so we took the limo up to NYC from Philadelphia this morning.
When we got to Wall Street, and made it through all of the necessary security checks, we were given a tour of the floor from the head trader of one of the firms. I knew that the NYSE had been converted to the Hybrid Market, but I was still surprised at how quiet and mellow the place was. People were just sitting around, hanging out, chatting, and staring at the computer screens.
The NYSE has changed - everyone was talking about it. It isn’t like it used to be. No more screaming crowds. It’s just like this article in the New York Times from September says:
But even on its busiest days, the trading floor is a sideshow compared with the center-ring attraction it was several years ago. Most of the action in shares listed on the New York Stock Exchange happens electronically, between the computers of traders at brokerage houses, mutual fund companies and home offices in spare bedrooms.
The instantaneous execution of trades those computers allow has diminished the value of much of what the humans on the floor used to do. For the last several months, the floor has accounted for less than half of the trading in the 2,700 stocks listed on the exchange. Three years ago, that share was about 80 percent.
“The floor as we knew it is dead,” said James J. Angel, an associate professor of finance at Georgetown University. “The old days when Billy would trade with Vinny and swap information about orders so that they could get a better price for their customer are gone.”
The specialists lost a lot of money with the move to technology - which is a good thing for all of us. The markets are now more fair and efficient, and quick.
The people were all very nice - and as you can imagine, there are some characters. I met a trader who had been there for 47 years. And the guy giving us the tour - his father and grandfather were floor brokers. From these people, you get a feel for what the place used to be - and how it has changed.
I was surprised at how many of the badges that the traders wore had the Irish shamrock on it. There are a lot of Irish on the floor of the NYSE, and if you are Irish on the floor of the NYSE, you put the sticker on your badge.
I didn’t get to talk with many people, but I was glad I went by the Berkshire Hathaway Inc. (BRK-A) post. If you’re going to see one post, it might as well be that one I guess. There was an older guy standing there, I think they called him “captain” or something like that. He didn’t seem busy at all. I see that 810 shares were traded on BRK-A today.
