Pssst! Here are a couple of insider tips: First, invest your Þnancial holdings in cellular technology. Second, divest your emotional holdings in noise.
Why? Because two of the world's largest stock exchanges, the American (AMEX) and the New York (NYSE), are going wireless. Before long, their uproarious trading þoors will be transformed into busy hives of hushed activity.
Both Wall Street landmarks have long been raucous madhouses with hundreds of buyers, sellers, and go-betweens shouting out deals simultaneously. From this sea of chaos has emerged a longstanding indicator of market activity: shouting volume and trading volume always maintain a 1:1 ratio.
All that is changing. Both exchanges are independently testing and installing cellular systems that allow brokers to roam the þoor with personal digital assistants that can process orders and transmit information to the famous stock ticker. The exchanges expect to complete the backbones of their PDA local area networks later this year.
The PDA system has many beneÞts, including faster order placement, greater accuracy, and better customer service. Warren Kaiser, a senior vice president at the AMEX, says PDA-mediated trading is an "extremely signiÞcant" development that essentially transforms brokers into roaming workstations.
There are other effects, too. With orders placed via wireless devices, paper trading slips are becoming a thing of the past. And the NYSE þoor is becoming a lot quieter, as information that brokers once shouted evaporates into cellular thin air. Comparing this with the trading-þoor environment of a few years back, Richard Edgar, a Big Board executive vice president, explains, "Although the general clamor is now at much lower decibel levels, we're dealing with much higher trading volumes than we were in the past."
So the shout-to-trading ratio has been reversed. For pundits who have long used noise as a measure of market activity, the PDA takeover probably seems like a hostile bid for the future. Nevertheless, with approximately US$22 million allocated to wireless projects at the NYSE alone, both exchanges speculate that hushed trading will generate a nice market buzz. And you can rest assured that traders will extract honey-sweet dividends from their new wireless hives.
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Hushed Market Buzz
