Assumptions vs. Reality
Everyone is familiar with the standard image of financial trading. A large room of well-dressed men with earpieces shouting and waving against a backdrop of flashing electronic numbers.
Reality is quite different. The vast majority of trades are done by computers away from the floor, and the stereotype of the people involved in such deals is nothing like what you will come across in countless movies. However, that scene remains the enduring image of stock markets. One made familiar by films like “The Wolf of Wall Street.”
One could compare this perhaps misplaced image to how people often perceive the world of poker. Outsiders might picture a smoky room and underground criminals bluffing their way to millions because his opponents are too scared to call him out. In contrast, the world’s best players are making millions behind their laptops using their statistical degrees and complex graphs to their advantage.
Behind the Media Portrayals
With that in mind, the return was unsurprisingly not met with unanimous celebration, with many critics labeling this move as being "far too soon." Some believe that this qualifies as special treatment, while others make the case that this doesn't qualify for such treatment. Others, like “The Most Photographed Trader on Wall Street” Peter Tuchman, are adamant that it isn’t too soon to reopen.
In normal times there tend to be two views of the NYSE’s physical trading floor, a feature many foreign markets have long abandoned. To its supporters, the floor is an important and more sophisticated adjunct to the vast majority of market trades, which are conducted by machines. If an investor wants to buy a stock at $15, the computer will quickly find a seller and make that trade. But a human on the exchange floor would talk to other traders and might discover lots of potential sellers milling around, and use their judgment to decide whether it is worth waiting to see if the price falls.
As one anonymous floor trader put it, “It’s the difference between delivery and going to a restaurant, where you can look at the menu and talk to the waiter about the specials...You get your food either way. But you get an inferior experience if you don’t go to the restaurant.”
The physical trading floor is a shameless marketing ploy, useful only as a backdrop for the network’s financial news bulletins. The viewers expect a trading floor, so TV producers decide to give them a trading floor. This expectation can also get turned up a notch during crises when Wall Street suddenly morphs into a symbol of the American way of life.
After the September 11 attacks in 2001, the exchanges closed down completely. Still, the markets swiftly reopened before predictably slumping. Then New York mayor Rudy Giuliani memorably described Wall Street as a “monument to our liberty.” With his current position as the president’s lawyer, his conviction for that statement is unlikely to have been dissolved.
For those who wish to learn more about stock market perceptions, we recommend checking out Administrative Science Quarterly’s Embeddedness, Social Identity and Mobility: Why Firms Leave the NASDAQ and Join the New York Stock Exchange.