What all-electronic trading means for the New York Stock Exchange
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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
Are states ready to roll out COVID-19 vaccines?
Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.
How is the service industry dealing with the return of coronavirus restrictions?
Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.
How are hospitals handling the nationwide surge in COVID-19 cases?
As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.
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