COVID-19 Forced Closure of NYSE Trading Floor
A little over one year ago, the onset of the COVID-19 pandemic forced the closure of the trading floor of the New York Stock Exchange (NYSE). This historical event marked the first time in 228 years that the floor was closed but all electronic trading remained open.
Although the pivot was intended to be temporary, the floor ended up being closed for the following two months. It finally opened again in May but with only 25% capacity. The capacity remained there for months. Recently, it opened up to 50% capacity, translating to about 160 brokers and traders being allowed to work onsite. This number represents a fraction of the traditional activity for the largest stock market in the world.
Why Move Back to Physical Space?
What is interesting to some is that the NYSE was able to pull off this move to the electronic space with ease. This begs the question of why should it return to its former state of flurry and activity? It is now clear that many of the positions on the actual floor of the NYSE were largely symbolic in nature. Do the markets really need all of that fluff when it has now been proven that the NYSE can function without a hitch nearly entirely online?
Detractors of the Move to Virtual Trading
Despite the support to keep the NYSE functioning in an online platform, there are still traditionalists that argue that the trading was meant to happen in person. Those in support of keeping the floor open cite savings for investors, lower volatility, and more accurate pricing.