The mythically glamorous trading floors of unbridled capitalism are nearing extinction. Innovation and technology have displaced big-swinging pit traders.
Legends and lore built reputations of larger than life big money men in a bygone era. Electronic trading has taken away the advantages pit traders used to profit.
Almost all trading action is on computers with sophisticated options strategies, leaving behind mere crumbs on the trading floor by which the pit traders of bygone times get by. Days are numbered for the colored coat crews that used to be the first line of finance.
Electronic Market Benefits
- Equal Opportunity – A level playing field of trading where all participants are treated equally regardless of who they are or position size.
- Tight Spreads – Increased volume and liquidity means better prices for everybody with an abundance of buyers and sellers.
- Money Never Sleeps – On-screen trading is nearly 24 hours a day in the global economy. Electronic orders to enter or exit are held by computers as prices move around the globe.
- Amazing Times – Now is the best time in history for the individual investor because of opportunity, access, and trading tools that used to be reserved for a select few.
The skill of trading on a screen is much different from the stamina and sweat required to make money in the on-floor octagon.
As pit people leave, their unique talents typically do not translate to the electronic market. Their objective was often to get the edge and be able to sell at the ASK or buy at the BID with scratching on the trade, no win or loss, the worst case.
Following order flow on the floor had advantages to seeing who was doing what, but that was before the RISE OF THE MACHINES.
