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All the Information You Need to Know About the Stock Market Trading Floor

Everything About the Stock Market Trading Floor

Back in the early days of stock market trading, people usually go to the different stock exchange located all around the world, with the main one being the NYSE or the New York Stock Exchange.

The premises is also known as the Trading Floor and this special place is where most trades are conducted.

However, in the 1990s, there is a constant push for modernization and computers are now being utilized to make the trades instead of physically being on the exchange floor.

Because of the convenience, traders who are still using the old method of making transactions are now a minority with the vast majority of investors moving to the online platforms.

However, even though that is now the case, there is still a sizable amount of people going to the stock exchanges.

In this article, I will talk about all the information you need to know about the stock market trading floor.

1. Floor Traders

The stockbrokers or agents are representatives from the different brokerage firms. They are the ones responsible for making the trades for their clients and they act as an intermediary to the different companies as well.

These brokers are also known as floor traders. What they usually do is confer with their clients and they will ask what they want to order. Once the trader knows what their client wants, they will go to a specific part of the exchange where stocks are usually being traded.

Other floor traders will also be present in the area and they will be the one to bid their price until the seller finds a suitable buyer.

2. Floor Trading

The NYSE is one of the only major stock exchanges where floor trading is still present. At the time of writing, floor traders only constitute 20% of the total population as the rest of the traders are now transacting online.

3. The Use of Modern Technology

Online trading is now more prevalent than ever before because there are plenty of things you can do, all at the comfort of your own home.

Computer programs or online trading platforms completely bypass floor trading; which makes transactions easier than ever before.

The beauty of such trading software is that not only can you buy or sell stocks, you can also make use of the program to look at analytics and other statistical data so you can forecast how trades are going to be made in the near future.

Even though it brings convenience (since some of them are automated), it is still best used with minimal supervision, just to ensure that the program will not do any mistakes in trading (which can really impact the price spikes that might happen during the day).

4. An Auction House

People who prefer the more traditional approach make use of floor traders. The traders make use of verbal and non-verbal cues to signify either the buying or selling of shares.

To differentiate traders from each other, they wear specialized coats or a unique Identification card.

Take note, however, that even though actual floor trading still exists, they are not as chaotic as they have been many decades ago.

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