Having a seat on the floor of the New York Stock Exchange has taken on new meaning since the Big Board opened its next-generation trading floor in the Main Room last week.
Traders now can enjoy the privilege of sitting down in an actual seat, which is new for them, but something upstairs traders have done for decades. The redesign essentially updates the floor with technology that upstairs desks have always had, according to Bob Airo, senior vice president for market operations at NYSE.
The NYSE’s upgraded trading desks make it attractive for brokers to move their upstairs operations down to the floor, Airo said. In some cases, firms have been able to consolidate their upstairs and floor operations. The benefit is clear: lower overhead costs and greater efficiencies through a centralized desk.
“Cuttone & Co. has already combined its upstairs and downstairs trading desks and MND Partners will do the same thing,” Airo said. Direct Access Partners and Barclays Capital are also moving into the renovated spaces soon.
Neil Catania, chief executive officer of MND Partners, who has worked on the exchange since 1981, told Traders Magazine the NYSE redesign is a marked improvement.
“I have not had a chair in 28 years and will not know what to do with one,” Catania said. “As a floor broker, I spend more time in the middle of the floor, but as the markets have changed, there are certain times now when I will be at my desk sitting down.”
The comfortable chairs stand in stark contrast to the now by-gone days of being shoulder-to-shoulder and thigh-to-thigh with fellow traders. The new spot gives him a luxury he never had in his 1930’s vintage booth–breathing space. This new layout even stopped him from establishing an upstairs trading desk at 14 Wall Street.
“We need to be together as a firm,” said Catania. “When there is verbal communication with the trader right behind you, there is no delay in getting an order done.”
Even firms that were skeptical about combining upstairs desks and floor traders in these new pods are reconsidering the NYSE new design. Airo said one brokerage firm was initially resistant to the idea of consolidating upstairs and floor operations, but it now has requested Main Room or Garage space to combine its trading desks.
Back in the 1990s, the exchange launched a similar program to upgrade floor brokerage booths. It rolled out so-called Super Booths for several bulge bracket firms. The Super Booths were like an upstairs trading desk–roomier and better technology–than the typical cramped brokerage booth.
But the concept never spread beyond the first few prototypes, due to a lack of space. At the time, the exchange held roughly an 80-percent market share of its stocks, in sharp contrast to today’s 25 percent share.
When completed, the exchange’s 30,000 square foot Main Room will house about 15 trading pods with each seating between 10 to 40 traders. The west wall will be completed by June and the east wall by late November or early December.
The new trading booths, designed by Perkins Eastman Architects PC, provide room for up to six video screens per workstation and are 28 inches wide by 24 inches deep, up from about 18 inches wide and 12 inches deep.
The next phase of modernization will be the 7,500 square foot Garage in 2011. Airo said initial designs are already being looked at which will provide a minimum 250 trader spots. Several firms already located in the existing space have expressed interest, but Airo said no tenant agreements have been signed.
There are 100 firms located in the Main Room and Garage.
Preliminary renovation plans for the Main Room’s North and South walls are also on the drawing board, said Airo.
The Main Room project also includes a new infrastructure network that supports the member firms’ own trading applications as well as NYSE broker applications. This enables the firms to use the same systems and personnel on and off the trading floor.
The Main floor renovation will cost the exchange $7.5 million, said Airo. Firms will pay a one time fee of $12,000 per work station and no additional seat fees for a minimum three years. No pricing has been set for Garage space.
