The stock market ditched Wall Street years ago. The masters of the universe, like the Giants and Jets, now scrimmage across the Hudson River in New Jersey—their trading these days done almost entirely by computers piping algorithmic playbooks into a fortress of servers in Mahwah and other competing exchanges nearby.
The small squads of human traders who remain on the floor at 11 Wall St., the New York Stock Exchange's Teddy Roosevelt–era headquarters, are (for the most part) just playing fantasy football.
Yet just as the Big Apple's football teams kept their New York names after wedding themselves to the Garden State, the financial industry, investors and the media continue to pretend that the Big Board is where the action is. We need to end this fiction.
How much actual trading is done at 11 Wall St.?
"It's pretty darn close to zero," said Eric Scott Hunsader, founder of market-data provider Nanex. "Even that is pushing it, because they don't make markets, the guys in the jackets. They might say they do, but they don't."
(To understand just how much electronic and high-frequency trading have reshaped the market, I suggest you read Michael Lewis's "Flash Boys" or Scott Patterson's superior "Dark Pools.")
So this will be the last time you will see photos of the NYSE floor—or any of the world's trading floors—on MarketWatch (unless something actually newsworthy happens there). The Big Board is now little more than a Big Tent for a phony media circus of photo-ops and cable-news talking heads. P.T. Barnum couldn't draw the crowds Jack Ma did last month when he clanged the bell to kick off Alibaba's IPO. The only things exchanged on the floor, however, were camera flashes, sound bites, and high-fives.
Don't get me wrong. I love the photos of the guys on the trading floor. They are human emoji, a shorthand able to illustrate the full range of stock-market sentiment from triumph to agony. (Peter Tuchman, a 30-year veteran of the floor, was recently dubbed the "most photographed trader on Wall Street" by BuzzFeed.)
And, to be fair, these "designated market makers," as the several dozen remaining floor specialists are now called, aren't there entirely for show. "There is a value to having humans in place at the point of sale—seeing them there provides a sense of security and accountability that a wholly electronic exchange cannot offer," said Eric Ryan, a spokesman for the NYSE. "When things are going fine—90% of the time you don't need a person, but when there are imbalances, instability, or when a fat-fingered trader orders a million shares instead of 10,000, our guys can catch it before it hits the marketplace."
Still, by relying on trading-floor photos, we have been distorting the truth rather than reporting it. We are doing a disservice to you, our readers, and therefore we too must change with the times and find new ways to illustrate the ups and downs of the market.
"The photos of traders, especially in times of jubilation or distress, have been the human face of Wall Street over the years despite technological changes," said Wall Street historian Charles Geisst. But the practice only began after World War II. "In earlier years, editorial cartoons were used instead, and they were usually less than flattering," Geisst said.
So how should we illustrate market stories now that the trading is really happening on what's effectively the New Jersey Stock Exchange? Return to editorial cartoons? Animated GIFs? Photos of downtown Mahwah?
We need your help. Give us your suggestions in the comments or tweet them with the hashtag #NoSadTraders.