For the first time in more than 200 years, the New York Stock Exchange operates without auction traders

(BFM Bourse) – The Intercontinental Exchange, owner of the New York Stock Exchange, the oldest market in the United States, has taken the unprecedented decision to switch to 100% electronic quotes as of Monday, pushing away auctioneers for cause of confinement. The quotes should hardly be affected, at the risk of definitively demonstrating that the physical presence of stockbrokers is above all a nostalgia.

The famous building of the New York Stock Exchange, at 11 Wall Street, emptied of the picturesque figures of brokers usually animating the “floor” by shouting the orders transmitted by their clients.

The American giant Intercontinental Exchange, one of the world’s leading operators of exchanges and clearing houses, has announced that the New York Stock Exchange is switching, as part of its business continuity plan, to fully electronic trading. “The decision to temporarily close the floor [le parquet, qui désigne la salle de marché où interviennent certains brokers et teneurs de marché à la criée] represents a precautionary measure to protect the health and well-being of employees and the operator community in response to Covid-19, “the group explained.

Other than that, all NYSE markets will continue to operate during normal trading hours. If the American incumbent operator regularly tests its ability to operate without the physical presence of brokers, this is the first time in 228 years of existence that the New York Stock Exchange has opened its doors without their presence in the trading room.

An old-fashioned tradition

“NYSE’s trading rooms offer unparalleled value to issuers and investors, but our markets are fully capable of operating in a fully electronic fashion to serve all participants, and we will do so until we can reopen. our trading rooms to our members, ”said Stacey Cunningham, President of the New York Stock Exchange. “As we take the precautionary step of closing the trading rooms, we continue to firmly believe that the markets should stay [physiquement] open and accessible to investors “.

Unlike its competitor Nasdaq, a much younger operator (created in 1976 and relying from the start on electronic quotes), the NYSE believes that stock trading works better on the NYSE floor than on electronic exchanges because of the physical presence of brokers and market makers. “Human judgment combined with the latest technologies results in reduced volatility and spreads [fourchette de cotation] tighter, “said Stacey Cunningham. In practice, traders usually present on site will transmit their orders through their terminals.

Intercontinental Exchange will continue to monitor the health situation to determine when to reopen the NYSE trading floor. But the vast majority of transactions already taking place at a distance, this episode risks bringing to light the somewhat outdated side of auctions, the maintenance of which is in part akin to the desire to preserve traditions, not to say a certain folklore. Most of the world’s major markets have now gone completely electronic, starting with the Paris Stock Exchange in 1987.

Guillaume Bayre – © 2020 BFM Bourse

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