I recall when Rob Hegarty, who was then head of the capital markets research and consulting practive at Tower Group (now CEB TowerGroup), told his audience at the 2009 TowerGroup conference that the NYSE trading floor would soon be a restaurant. The audience had a good laugh at the time. Today, if he said the same thing, he would be met with nods of agreement.
The trading floor of the New York Stock Exchange, lauded as the epicenter of capitalism for over 200 years, is really nothing more than a museum or television studio today.
True, there is trading that still happens on the floor, but only a tiny fraction of what used to change hands even just 10 years ago. And there are still traders on the floor, but must spend their day looking at computer screens or tablets rather than shouting orders and waving paper tickets like you see in the movies.
While it is also true that a trading floor does serve some purpose, such as during times of market stress or when the technology behind today's modern market goes haywire (Flash Crash), those instances are few and far between. With technology glitches shake the markets again? Yes, the tech problems will almost certainly resurface every now and again. But does the fear of an event that happens only once every couple of year justify maintaining a physical trading floor? Hardly.
Now with trading volumes around 9 billion shares per day in the US equities markets (down from a peak of over 20 billion in 2009), coupled with a extremely competitive and efficient trading marketplace that has compressed margins, the future of the entire NYSE looks bleak. The idea of turning the floor of the NYSE into a museum, or a restaurant, or both, looks better every day, according to this video from Bloomberg TV:
Meanwhile, the Intercontinental Exchange's CEO Jeffrey Sprecher, who agreed to buy NYSE Euronext this past December, really had his eyes on Liffe, NYSE's more lucrative derivatives operation. The traditional NYSE equities exchange really just came along with the package, and now Sprecher will need to figure out what to do with it.
So, the prospect of seeing the NYSE converted into a museum/restaurant/retail or multi-use facility might make some long-time equities traders uncomfortable, but it is really just a sign of the times. The equities business isn't what it used to be and the trading floor has really become unnecessary.