Prior to new technological advancements, traders on the floor of the New York Stock Exchange would use hand signals and verbal communication to carry out any trades. The trading floor was known to be busy and loud, with hundreds of traders running back and forth between posts.
Decades later, the NYSE floor is a lot calmer, with fewer traders, as systems were replaced with computerized networks. In the video above, NYSE Archivist Pete Asch explains how the trading floor evolved from chaos to calm.
Full Video Transcript Below:
J.D. DURKIN: People know that ultimate Wall Street era film, at least how it's depicted in the 80s and the shouting and today technology has brought us into a different era. Can you give us your sense on that evolution? How did the trading floor go from the images that people might be kind of familiar with to what it is today?
PETE ASCH: Definitely, I mean, that has lot to do with - in 1975, the SEC changed how we could trade on our floor in terms of there was a set commission, so they introduced discount brokers. On the retail side, it's great because now most of us can pull out a phone and for free trade securities because there's not that big commission at the end that you need to pay for it. But as a result, you think about how to become more efficient, how do you be quicker? And so that really introduces technology to our trading floor and introduce the speech, our trading floor faster than a human can.
And you think about it on one hand, it's great. It looks great in movies. You watch old, old, old styles running around and screaming. It's probably not the best way to run your economy. Right? You know, like everything - you know, I happen to be a little bit taller than you, and a little faster. So I get my order and you don't. It's kind of a strange way. And so what happens is they begin to think, how do you do this better? And so one of the things we did is get rid of paper, move things into electronic, basically what that does, so the reason why you don't need as many people, if we are trading stocks in paper orders and I'm having to announce each order, I need a whole fleet of people to help me.
So, so at our height, we had about 5,000 people working on the trading floor. Of those 5,000 people, only about 1,366, and that's not even almost, it's exactly, trading license we had were what we consider your members. Right were floor members. Right everyone else was supporting them. Very important but supporting them. Today we have 300. So there's been a big decrease in the number. Right, from 1,366 to 300. But it's really it's the fact that those how powerful those 300 people can be using technology, not needing to yell every order out, not need to manually rolled the number on the screen. You know, it all happens much, much better. And they're using best in class technology to do what we've done before, which is have that human at the point of sale, but use the technology to sort of not need to run and scream at each other all day.
