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Evolution of the Trading Post on the New York Stock Exchange


As a lover of antiquity and collector of things, I decided to take a look at the development of stock market trading posts in terms of their form and function. Just how did these simple pieces of office furniture evolve into such colossal computerized beasts? If a stock broker from the 1920's walked onto the trading floor today, he might shriek in fear that H. G. Wells was right! New York has been invaded by mechanical space pods, twenty-five feet high with multi-eyed tentacles streaming colorful flashes of numbers and letters to hypnotize their prey. All the while, endless miles of pneumatic tubing and high-tension wires shoot messages and information back toward the sky. 

But on second thought, our 1920's broker might not even bat an eye. For most of these inventions already existed back then, and were being incorporated into the trading floor. Electric light, telephones, telegraphic email, and pneumatic tubes had been around for decades. Projection screens, wireless quotations, and even televisions were already on the market. The stock exchange gets first glimpse at many new technologies and is quick to incorporate them. So our antiquated broker may be impressed at the size and speed of today's market, but a little disappointed that only a few of the clerks have been replaced by robots.

Although today's trading post looks more like a Lunar Lander than a brokerage desk, they did have humble beginnings. In the early days of the New York, stocks were traded in a "call market." The president of the Exchange would call out the name of a stock from his list, and brokers had a limited time to trade that one security until the next stock was called. Each stock could only be traded twice per day, once in the morning session, and again in the afternoon session.

In 1871 it was decided that continuous trading of all stocks would better benefit the members, so each specific stock was given a fixed space on the exchange floor. This led to the creation of the "stock specialist" in 1872, who in turn would create the "specialist post," a.k.a. the trading post. Some highlights in their evolution are shown below.

 

 

1872

The first trading posts look like ornate street signs, each bearing the name of a specific stock. Transaction records are pegged to the front and back showing the current market price and the day's activity. Most posts are surrounded by four leather chairs, but busier posts have seating for nine people.




 

1881

The building was expanded and it came time to upgrade the trading posts. The chairs were removed and round benches built in their place. They had six wooden legs, armrests, and a six-sided backrest. Indicators were added to the front and back displaying the last sale price of two stocks.

 

  1887

The armrests were removed and more price indicators added. Each post displayed four to eight different stocks.

  1893

Each trading post has 12 hand-operated indicators above the specialist's sheets.

  1903

The Exchange moved into its present building. Trading posts are now numbered and have 16 price indicators. The post benches lost their legs in favor of a wooden skirt.

Scars left behind from these old posts were found in the floor during the 2011 renovation.

  1918

A pneumatic system is installed with tube stations built into each post. The trading posts have drawers in their round bases, 24 price indicators, and leather seat cushions. As the posts transform from fixtures into technological devices, their construction and maintenance is turned over to the New York Quotation Company, which is owned by the NYSE and runs the Exchange's stock ticker service.

NYSE Trading Post Indicator

  1922

An extension was added to the building and nicknamed "The Garage"

  1926

The specialist's transaction sheets are now recorded in hand-sized binders known as "specialist books" which can be housed in new slots above the trading post's backrest.

  1928

The trading floor is expanded and telephones added to trading posts. A prototype U-shaped trading post is installed, sporting 11 seated stations with 9 indicators each. The interior is decidedly too narrow, so the front-center station will be widened, adding 6 more indicators.

  1929

Twelve new U-shaped trading posts with leather countertops and flip-down seats are installed. Specialists sit outside, while clerks and pneumatics are inside. Completed just before the stock market crash, they remain in service for over 50 years.

  1932

Five more U-shaped trading posts are added in the Garage, but unlike the main trading floor, these individual stations have 10 vertical price indicators (2 rows of 5) rather than 9 horizontal indicators (3 rows of 3). The front-center station is widened further with 16 indicators and 2 seats.

  1938

Many of the original 2-hinge seats (left) have broken from years of abuse. Seats are reinforced with a central support hinge (right) so even the heaviest specialists can stand on them to adjust the indicators. Posts on the main floor got a 12th seat added to the front-center station, while some Garage posts added a 13th.

  1939

The Exchange allows public tours for the first time during the New York World's Fair. A miniature model of a trading post is displayed, and an 18th post is built in the Garage.

  1943

Women are allowed on the Exchange Floor for the first time. The labor shortage caused by World War II forced the NYSE to hire female messengers.

 

  1969

The “Blue Room” opens with two giant trading posts (designated as four), adding 7,000 square feet to the trading floor. Electronic transfer of securities began in 1968.

  1978

Computer screens are installed atop each station. The Intermarket Trading System (ITS) provides an electronic link between the NYSE and other exchanges.

  1980

Horseshoe-shaped trading posts with multiple screens, readers, and printers.

  1995

Flat screen displays, fiber optics,  wireless data system and hand-held devices. Hardware and software upgrades increase handling capacity to 1 billion shares a day.

  2001

Lighted NYSE signs are added on top. Trading posts still have the 3-hinged flip-down seats from 1938. Chairs are not allowed on the floor, unless absolutely necessary. A lone stool was seen chained to a trading post, so neighbors couldn't "borrow" it.

   

  2011

Due to increased computer trading, there are fewer people on the Exchange Floor. This allows for wider trading posts with interior seating. They have blue countertops, more and better data screens, and brighter lighting. The NYSE's latest logo was unveiled Monday, May 14, 2012 -- three days shy of the 220th anniversary of the Buttonwood Agreement.

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