Twiddling your thumbs on the trading floor

There was an article in The Wall Street Journal the other day on the decline of activity on the NYSE trading floor. No, it's not the lousy economy. Like so many other professions, floor traders are victim to automation: most of the trading volume on the Big Board moves electronically. (Note: access to source article may require a subscription.)

I'm a bit sorry to see these guys - and it is mostly guys - go. I always enjoyed seeing their mad gesturing and shouting, the scraps of paper on the floor, the cruddy little polyester jackets.

I've never been on the floor of the NYSE, but many years ago I got to spend a few minutes on the floor of AmEx and on that of the commodities exchange. This was in the 1980's, when Instinet and other electronic trading systems were being introduced, but most of the action was on the floor.

I got onto the AmEx floor when I worked for Wang: AmEx was a client. For the commodities exchange visit, I was a guest of a salesman at Interactive Data Corp who had a seat on the gold exchange and was allowed to take "civilians" onto the floor.

The commodities exchange was particularly frenetic. The pits for the different commodities were pretty much just areas blocked off by file cabinets (if I remember correctly). In the enclosure made by the cabinets, and perched on top of them, the traders were going nuts. I was exhausted just being there for a couple of minutes - there was an explicit (and small) number of minutes that those without a seat were allowed on the floor during trading hours. Believe me, I was happy to beat a retreat. I think I aged 10 years just walking around and being exposed to the insane level of activity. I don't even know if the pits exist anymore, or whether everything's gone electronic, but my visit there was definitely memorable.

Things have completely toned down on the NYSE floor from what they were in their heyday. To begin with, there are far fewer floor traders than there used be: the population has declined from over 1,000 in 2006 to a bit over 500. These days, the floor traders generally see action only at the opening and close of the trading day, when there's a complex trade that need special handling, or when there are problems that need to be ironed out. Even then, the traders are using electronic hand-helds - not slips of paper.

The switch has cut into the money that the traders make - and it also gives them big blocks of downtime.

So, what are they doing with it:

They're watching DVDs in the members' lounge - no surprise that Rambo and Wall Street are popular flicks. They're taking long, sometimes liquid, lunches. Mr. Mom-ming their kids around. Listening to their iPods. Taking online courses. Chatting about sports. Playing computer games. Surfing the web.

It's especially hard on the old timers, who still come in regularly and hang out in an area termed - in pure Wall Street style - Jurassic Park.

With so little going on , it's just not as much fun as it used to be:

"It's like coming into a funeral parlor each day," says Billy Blum, an institutional broker with W.J. Blum & Sons LLC.

One of the side-issues that's emerged from the decline in the floor activity is that the news media no longer have the iconic shots of "despondent traders, palm to forehead, express[ing] the pain and tumult of Wall Street's slide."

Well, that's what stock photos are for... (Another iconic shot that must be even harder to scare up these days is that of nuns in habits. Whenever I see old-timey nuns on the scene in a movie background, I know that they're fakers.)

With the shift to electronic trading, NYSE has become more efficient, and pricing has become more competitive - a win for investors, but a loss for those sentimental fools who value tradition and local color.

I feel a bit badly for the displaced traders - all that adrenaline, all that testosterone - with time on their hands. There is almost nothing worse than having nothing to do at work. But unlike some jobs I've had, they don't have to look busy. Their time is their own, and if they want to keep watching re-runs of Gordon Gekko rather than curl up with a good book, that's their choice.

When I've had boring, dead-time jobs, they've generally been the kind where you're not allowed to sit down, and you have to look perpetually busy.

As a sales clerk, there's only so much merchandise straightening you can do, and when I worked retail, I was often relegated to standing there trying to keep myself from going nuts by doing things like extract the square root of my Social Security number or figuring out all the 4- and 5-letter words I could make out of the letters in my name. (Answer: plenty.)

The waitress jobs I had demanded that, if we were on the clock - making some munificent sum like $1.15/hour - we had to be wiping down tables, filling salt shakers, or standing around at attention. The complete recipe for developing a cigarette sneaking habit, that's for sure. At Durgin Park (an ancient Boston tourist-trap), when there were no patrons, we had to hull strawberries. One time, I got in an argument with a diner who insisted that the strawberries on the shortcake were frozen. I held out my fingers, which were still stained red from the afternoon's hulling efforts. I won the argument, but got a lousy tip.

During my professional career, there have been a few brief periods - generally in the run-up to some major reorganization and/or lay-off - when real work dried up. Well, there's only so much rumor-mongering you could do in a day, and I had a few times when I had to completely create make-work for myself so that I wouldn't go batty.

These days, of course, my down-time and up-time are my own - and I seldom find myself so bored that I feel the need to whip out a pen and paper and figure out the square root of my SSN. But I just might do it some day. Not that the information will ever come in handy, but it's not a bad idea to keep those mental skills finely honed...