On The Floor

I will never forget the time I spent half a day on the floor of the New York Stock Exchange. Prior to September 11, 2001, the second-floor gallery was open for visitors to observe the madness of the Exchange during the business day.  But tours have not been available for almost six years. And even when tours were available, visitors had to stay above the action and out of the way. But I was on the actual trading floor, a locale that few have experienced. I spent a day there because I was an intern at the NYSE Division of Enforcement during my last year of law school. I was not involved in the day-to-day trading aspect of the Exchange, but rather worked with attorneys that monitored the specialists and brokers on the floor (click here for an explanation of what a specialist is and how they maintain a fair and orderly market by providing liquidity and acting as agents for publicly traded companies). Not only do the federal securities laws apply to each person on the floor, but so do the numerous NYSE regulations. Consequently, there is a whole separate division of the NYSE responsible for the enforcement of those laws and the prosecution of any violations. I worked there part time for four months.

 I don’t remember whether the market was up or down the day I visited (and it certainly wasn’t as volatile as it has been in the past few weeks), but I remember how hectic the place was. Unlike what you see on television, the NYSE is quite large. The large trading floor that is shown constantly in the media is only one room of many. The technology used by all parties is quite sophisticated and impressive; it also does away with the need to use paper to execute each trade. Some old timers still tell stories of cleaning up knee-high piles of crumpled paper that were used to write bid and ask prices throughout the business day. Everything moved so quickly. The atmosphere was intense and emotions ran high. It seemed that everyone had a nickname and women were still a rare sight. There was definitely a “clubby” feel to the crowds on the floor and the feeling I received was that positions came truly from who you knew and less from what school you went to in a way that is different from the legal or investment banking world. In fact, many of the people currently working on the floor never even attended college, but have risen through the ranks from a “runner” to a trader. With that as the case, believe me when I say that only the strong have survived.

As exciting as it was, however, I couldn’t imagine working there each day, let alone the bad days the market has had in the past few weeks. It was an experience that few people have and one that I am unlikely to have again.

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