Digital age puts NYSE traders in limbo

"It is tough to complain about business when people's lives have been affected," he said. "This directly impacts our pockets. Machines and computers don't eat and drink."

The absence of longtime floor brokers has not gone unnoticed. Traders and others that work the trading floor think of themselves as a community.

"It pains me," said Rutigliano, president of the Organization of Independent Floor Brokers, a group that represents about 400 or so traders. "These changes have resulted in many good and talented people leaving, and unfortunately, I don't think we've seen the end of it."

Rutigliano, who is also director of floor trading for W.J. Bonfanti Inc., explains traders will weather the changes and survive. He can't imagine doing any other job — even that of a Hollywood actor, which Rutigliano knows a thing or two about.

He was featured in the movie "Wall Street," playing the trader working on behalf of actor Michael Douglas' character Gordon Gekko. When the movie runs on cable during a weekend, Rutigliano said he gets mercilessly teased at work.

The footage of a crowded and boisterous trading floor in that movie seems almost anachronistic compared to the current atmosphere. The list of brokerages that trade the stocks, and specialist firms that match buyers and sellers, are dwindling.

Earlier this year, Van der Moolen Holdings NV — a Dutch specialist firm whose U.S. unit helps match buyers and sellers at the NYSE — said it will slash about 30 percent of its work force. Similar moves have been made by LaBranche & Co. and Bear Wagner, and specialist units operated by banks like Goldman Sachs Group Inc. and Bank of America Corp.

Traders from major firms from Merrill Lynch & Co. to Lehman Brothers Holdings Inc. have removed employees from the floor. The NYSE itself is also cutting about 500 jobs.

Behind the changes is the Big Board's competitive need to provide speedier trades, an important step as it evolves into a global exchange with the acquisition of Paris-based Euronext NV and a stake in India's National Stock Exchange. The NYSE also just signed a broad alliance with the Tokyo Stock Exchange that could set both up for a future combination.

Automation is the only way for the NYSE to handle far more trades and remain competitive. It means the specialist firms previously logjammed with transactions can now more easily manage thousands of trades each minute.

Transactions pumped out in a millisecond allow specialists to cut the number of computer keystrokes to 20 million from 45 million each day. The average time to complete a trade has fallen sharply — to about three-tenths of a second from nine seconds before — and the exchange plans to cut this by a further 90 percent.

Around the globe, major exchanges are for the most part electronic institutions. The London Stock Exchange, currently the target of a hostile takeover by the Nasdaq, has traded electronically since what the British press called "The Big Bang" in 1986. Euronext, the pan-European exchange with subsidiaries in Belgium, France, the Netherlands, Portugal and a derivatives market in the U.K., trades electronically.

And, in the U.S., rival Nasdaq has been the largest screen-based stock market since it launched in 1971. The exchange said its system is more open and transparent, where all trades are equal and without the influence of brokers that might have a bias.

Still, those on the floor contend you cannot replace human intuition. A computer cannot trade on gut instinct, and Wall Street still demands the kind of savvy that traders and specialists bring to the table.

"Nobody knows these stocks better than me," said Edward Sweeney, a vice president for Bear Wagner that manages stocks such as Abbot Laboratories. "The hybrid system allows us to stand back and make better trades. But, when there's a volume spike or an important trade, there is still plenty of opportunity for us to make a living."

Under the new operation, stocks will trade electronically most of the time, but can revert to a floor trader at the request of a client or during periods of volatility.

Louis Pastina, an executive vice president at the NYSE in charge of the hybrid rollout, said customers now have more choices in trading NYSE-listed securities. They can decide that important trades that demand attention be completed by a trader, instead of being processed anonymously through a computer.

"You might buy a book on eBay, but you might not want to buy a brand new Mercedes Benz that way," he said. "The same thing applies here."

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