Why They Wear Jackets On The NYSE FloorO
They’re on financial television and in pictures, jacket wearing people on the floor looking frantic and almost pulling their hair out! Who are they, what are they doing, and what’s a typical day like? It’s not that it’s really cold on the floor so they have to wear jackets, they define them as floor brokers who provide information and execute orders for clients by acting as their eyes-and-ears on the markets and Julie La Roche of BI caught up with an anonymous floor broker in her article, “A Day In The Life Of A New York Stock Exchange Floor Broker to reveal to you what a typical day looks like as well as some basic facts for you younger monkeys out there...
A TYPICAL DAY
7:30AM - 8:00AM
A floor broker’s day begins a few hours before the opening bell and might get in around this time to read newspapers, newswires, and check their Bloomberg terminal as well email stories or links to their clients.
Floor brokers start getting orders and “look requests”, a price for the open-close and / or the buy-sell imbalance. If such a request comes in during the middle of the day, information such as who’s buying and selling, any rumors, or news would be pertinent and it’s likely that the broker would find this out from a specialist.
9:15AM - 9:45AM
During this time complete mayhem ensues for at least 30 minutes while the initial news and orders of the day are absorbed.
9:45AM – 10:00AM
This is when the algos and program trades take over with the exception of some face-to-face and completion of the “other side” of trades.
12:00PM – 2:15PM
My experience has taught me that this is when volume dries up and trades stagnant as floor brokers [and everyone else for that matter] are on lunch…brown bagging at their desks of course!
3:30PM – 3:59PM
If a stock had a good movement during the day typically the close may have significance as well and by 3:00pm the bond market closes. This is when things start to get crazy again when requests come in for closing price and volume as it’s said that "amateurs open the market and professionals close it" and it seems to have some truth.
4:00PM – 4:15PM
Once the closing bell is sounded, the next 15 minutes is spent auditing trades for any discrepancies and shortly after that the floor starts to empty out and the day is done. LIFO is beautiful thing as a floor broker as compared to an IB!
A FEW QUESTIONS
Isn’t flooran antiquated model now?
It's not a matter of the floor vs. electronic. Almost all the down here is electronic but with a human touch."
Further, floor brokers have access to any and every OMS, algo, and computer program and some of them are for brokers only that take into account parity and open-close plus there’s more IM and computers than chatting and people nowadays.
What type of education did you need?
...a lot of the guys down here never even went to college, but worked at delis, auction houses and other fast-paced environments."
It all boils down numbers, instructions, and work ethic. College doesn’t matter, what does is not crying when you’re yelled at, being excellent with arithmetic, and punctual will make or break you in the heat of the moment and it’s even more so if you trade in the pits in CHI or NYMX, there you’ve got to be sharp and calloused.
Is it a cut-throat world like IB?
No, a sense of community pervades the floor and it’s typical to have brokers come together to help another broker’s sick kid or parents even if they duked-it-out earlier. It’s like a large family with a lot of in-fighting but there’s a real sense of camaraderie on the floor.
FOR MORE INFORMATION
1. See derivstrading response to, Can Someone Please Explain Me The Different Roles On A Trading Floor as well as his article on M&I.
2. If you’re ever in NYC check this out, The Wall Street Experience.
I hope this helps!