COVID-19

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

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

Could waiving patents increase the global supply of COVID-19 vaccines?

India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.

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.

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