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What all-electronic trading means for the New York Stock Exchange

Justin Ho Mar 23, 2020
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Spencer Platt/Getty Images
COVID-19

What all-electronic trading means for the New York Stock Exchange

Justin Ho Mar 23, 2020
Spencer Platt/Getty Images
HTML EMBED:
COPY

Starting today, the New York Stock Exchange’s trading floors are temporarily closed. Trading will continue during normal hours, but it will happen electronically. That means all those bustling traders you see on TV and in photos won’t be working on the trading floor.

The NYSE says it’s run plenty of tests and that its markets are fully capable of operating electronically. But NYSE President Stacey Cunningham says the market will be missing something.

“A computer doesn’t apply judgment quite the way people do,” she said.

For instance, when human traders meet on the floor and agree on a fair closing price, Cunningham says those prices tend to be more stable.

On their own, computers can cause prices to fluctuate.

“You want to know that when you bought or sold something, the price doesn’t rapidly change to a totally new value afterwards,” Cunningham said.

Electronic trading isn’t new. The NASDAQ is already a fully electronic exchange.

But Justin Schack at Rosenblatt Securities says the NYSE’s human traders have stepped in to stabilize markets when there have been software glitches, or during a financial crisis.

“In times of stress, it’s very important to have human beings involved and actively engaged in the trading process,” he said.

And with market volatility reaching levels we haven’t seen since 2008, Schack says, yes, this is a time when markets are stressed.

COVID-19 Economy FAQs

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

Give me a snapshot of the labor market in the U.S.

U.S. job openings in February increased more than expected, according to the Labor Department. Also, the economy added over 900,000 jobs in March. For all of the good jobs news recently, there are still nearly 10 million people who are out of work, and more than 4 million of them have been unemployed for six months or longer. “So we still have a very long way to go until we get a full recovery,” said Elise Gould with the Economic Policy Institute. She said the industries that have the furthest to go are the ones you’d expect: “leisure and hospitality, accommodations, food services, restaurants” and the public sector, especially in education.

What do I need to know about tax season this year?

Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.

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