NYSE-Euronext Merger Could End Floor Trading
The New York Stock Exchange - whose trading floor remains crowded with actual, human buyers, sellers and market makers - could go fully electronic if its bid for Euronext is successful, thus ending the era of exchange-based floor traders.
The Financial Times reported the possibility was hinted at by Big Board Chief Executive Officer John Thain. It was Thain, notes MarketWatch, who overcame trader concerns to engineer the purchase of the electronic stock exchange Archipelago in 2004.
The FT notes that regulators have been skeptical of the Big Board's contention that its peopled trading floor soaks up market volatility. Instead, they've investigated numerous floor-based trading firms for questionable practices.
Meanwhile, observers such as the Motley Fool's John Finneran argue that ending the use of floor traders would boost the NYSE's operating margins from last year's 11 percent into the 50 percent range, and would allow the Big Board to make more money from the trading volume increases most expect to see in the coming years.