A Private Tour of What's Left of the Options "Floor"
It's 8 am and I'm writing to you from my hotel room in the French Quarter of Philadelphia.
Yesterday was an absolute blur! As promised, I spent the afternoon at the Philadelphia Stock Exchange (really the Nasdaq OMX inside the Philadelphia Exchange building).
First up, our new buddies at the Exchange gave us a tour of what's left of the options "floor."
The options "floor" is really just a dozen or so guys staring at their computer screens, and making changes. Several guys watch four different screens at once, so they looked more like hackers than traders.
But regardless, these "market makers" sit quietly all day and create the options market for roughly 20% of the options trading done in the U.S.
No hand signals. No shouting. It's all much more civilized in this computer age.
In fact, the only real interaction I saw was with the brokers who strolled past the market makers. Our guides informed us that brokers come to the exchange simply ask the market makers for the price of a certain asset, but they never say whether they're buying or selling.
Even more interesting: An entire line of those "hackers" on the floor have a special job. Technically, they are the fail-safes - they can dive into the market and shut things down, if the markets go crazy and the computers fail. In other words, they back up the computers. "Human stop-losses."
Okay, I must dive into more work - signing off from Philly!
Kat Von Rohr, Managing Editor
World Currency Watch