A man cleans up on the trading floor, following traders testing positive for Coronavirus disease (COVID-19), at the New York Stock Exchange (NYSE) in New York, U.S., March 19, 2020.
Lucas Jackson | Reuters
There was considerable trepidation among trading desks over the weekend as many in California, New York, and Massachusetts were told to start trading from home.
The two main concerns: Would the technology work and would traders be able to effectively interact with each other and their clients?
For the most part, it appears traders are adapting.
“Ninety-three percent of our staff has been trading at home for the last week and a half, and 98% are fully functional,” said Steve Starker, who runs BTIG, one of the larger institutionally-focused trading desks. He too was calling from his home.
Starker, who had been preparing to have his staff work from home for weeks, said the technology is working fine. The biggest concern: Broadband capacity on the internet with so many working at home. But there have been no interruptions.
What about the ability to communicate among traders and clients?
“We have instant messenger services, we have WebEx, we have Zoom, but we also have our hoot,” he said referring to the squawk box that traders use to communicate with each other on trading desks.
Starker said he has one hoot that connects to all 16 of his traders simultaneously, and another global hoot that simultaneously connects to all the sales people in the U.S. and Europe.
“People are making more of an effort to communicate via voice” using the hoots, he said.
For Starker and other Wall Street trading firms, it helps that equity volumes have doubled in the past month, greatly increasing the need for Starker’s brand of personalized, high-touch trading.
“Our business is up 50%,” he said.
Even traders outside the main centers in New York, San Francisco, and Boston are moving their people to work from home.
Jack Miller is the head of trading at Baird, a privately held firm that offers wealth management, investment banking, and research. Half of Baird’s trading staff is in Milwaukee, and most of the other half are in New York.
“Sixty percent of our traders are working from home, up from nothing two weeks ago,” he said, calling from his home in Milwaukee. “Three weeks ago we were talking about whether it was even feasible.”
They too were worried that a home setup would not have the “juice,” or the reliability to handle the traffic in home systems. But for the most part, that has not been an issue.
Communication between traders has also been better than feared. “Other than standing up and yelling across the room, it’s the same as before,” Miller said, noting Baird traders also have hoots, that allow them to communicate with each other.
Traders, some in medical masks, work on the floor of the New York Stock Exchange (NYSE) on March 20, 2020 in New York City. Trading on the floor will temporarily become fully electronic starting on Monday to protect employees from spreading the coronavirus. The Dow fell over 500 points on Friday as investors continue to show concerns over COVID-19.
Spencer Platt | Getty Images
As for the New York Stock Exchange, officials are grappling with when — and under what circumstances — to reopen the iconic trading floor, which remains temporarily closed while trading continues electronically.
“We will re-open when we are confident we can keep people safe and not add any additional strain on the medical community ,” New York Stock Exchange President Stacey Cunningham said in an email this afternoon.
The situation has been complicated because several floor traders have tested positive for coronavirus. The NYSE has been urging those on the floor last week to self-quarantine.
One bit of good news: The switch to all-electronic trading appears to have gone smoothly. Few if any technological glitches have been reported.
As for the floor community, while there was considerably anxiety going into floorless trading, most seem to be adopting.
“I am in front of a Mac computer, I have a large 27-inch screen, I have my Bloomberg and my order management system,” John Monaco of Wellington Shields said in a phone call. “I am able to trade off-floor, and I am one of the fortunate ones that is not lacking for business.”
Missing the floor
Another floor trader, Jonathan Corpina with Meridian Equity Partners, noted the impact on the floor traders depended on what type of business they were doing. Corpina has a mix of business, including broker-to-broker interactions that are done on the floor, a buy-side business where they interact with hedge funds, pension funds, and mutual funds, and an options business.
He said his options and buy-side business was doing fine trading electronically, but his broker-to-broker business was more limited.
“I have been fielding calls from clients about certain order types they do not normally have access to, and there is still the missing component of the interaction with the floor brokers,” he said in a telephone interview.
Still, he too is trading from home and like Monaco has a system for interacting with clients. “The technology is exactly the same as we had on the floor, minus the handheld systems.” The handheld systems enabled broker-to-broker interactions.
Like many floor traders, Corpina believes that some combination of testing and splitting up the trading teams will likely enable the NYSE floor to start up and still provide the health safeguards everyone wants.
The NYSE was already doing temperature tests of everyone going into the building. Corpina said it would make sense to combine that with immediate on-site coronavirus testing that would likely be available in the next few weeks.
As for staffing, he noted he has a staff of 16 people on the floor. “Maybe we could bring four back” initially to get the floor up and running, and keep the others off-site,” he said.
Corpina, who has spent his whole career on the floor, is eager to get back. “I miss the trading floor environment and I’m looking forward to getting back as soon as possible,” he said.