My friend Bart Ward is the CEO of an investment-management firm in Anoka, Minn. and also the biggest financial-market-history buff I know, as evidenced by his many comments on this blog, and his own column on his firm’s Web site.

So in response to my post The Remake of the NYSE Trading Floor: Who’s Responsible and What It Means, Bart wrote:

Ray,

I bet you folks have found some pretty neat things under all that wall covering. I have seen the floor transformed quite a few times since the early 1980s, but this one will be more than just an update or an add to technology. Are you guys taking any tips from your colleagues at Euronext Amsterdam? While I realize they have a much different operation, as you know they did quite a transformation to their floor back a few years ago.

I can’t tell you how many NYSE floor eulogies I have read over the years, starting with Chris Welles book, “The Last Days of the Club,” which by the way was written in the mid ’70s.

Keep up the good work Ray!

Regards,

Bart Ward

by Bart Ward on March 10, 2010 3:40 PM

And I responded:

Bart — Thanks for the good note. I think the stuff they dug up in the construction was more along the lines of the detritus that builds up in your desk drawer over time, not stuff of archival value. But I’ll ask and let you know.

You hit the nail on the head about Amsterdam — our good colleagues work in re-opening their floor to traders gave us the inspiration to re-imagine our floor.

I too have read many premature obits for the NYSE and the floor over the years. I hope to make it to retirement age here, and maybe I’ll throw myself a party and read a bunch of those obits aloud for a toast. Long may the floor run.

by Ray Pellecchia on March 10, 2010 7:43 PM

Bart’s comment about finding neat stuff during the construction stayed with me, and I asked around. In comes this e-mail from my colleague Harry Weber, one of the heads of the NYSE next-generation trading floor project:

The question you asked which came from the comment posted on your blog — I thought about this a bit. We did uncover something I thought was fascinating. It wasn’t in the new booth area, but under [specialist] Post 1, when we were gutting it, stripping the floors and creating swing space [for the floor brokers displaced by the new construction].

I couldn’t figure out what it was at first, and then learned it was the base of the original trading posts that you see in some of the vintage photos. It is hard to tell from the attached photos, but the circular cutout is slightly larger than a manhole cover.

Some may not appreciate this, but like you, I stared at this circular cutout on the floor and imagined this place a hundred years ago!!

Thanks for that, Harry, and for including the photos you had the presence of mind to take before the contractors swept that history away:

How cool is that? Kind of a ghostly image, almost like the outline of the old trading post was etched into history as it was carved into the old wood floor, to be uncovered and reflected on decades later like a time capsule. A reminder of how the marketplace has remade itself time and again throughout its history and is doing so again today.

Harry also included — courtesy of our AMCs (archive-maintaining colleagues) — a photo of what the smaller trading posts looked like back in that day:

I’m reminded of a saying I’ve heard here:

The tape keeps moving, right to left.

Or as Ferris Buehller famously put it:

Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.

I’ve also heard of another artifact being uncovered, and I’m going to check that out and will report back another time. Have a great weekend, my friends.

My friend Bart Ward is the CEO of an investment-management firm in Anoka, Minn. and also the biggest financial-market-history buff I know, as evidenced by his many comments on this blog, and his own column on his firm’s Web site.

So in response to my post The Remake of the NYSE Trading Floor: Who’s Responsible and What It Means, Bart wrote:

Ray,

I bet you folks have found some pretty neat things under all that wall covering. I have seen the floor transformed quite a few times since the early 1980s, but this one will be more than just an update or an add to technology. Are you guys taking any tips from your colleagues at Euronext Amsterdam? While I realize they have a much different operation, as you know they did quite a transformation to their floor back a few years ago.

I can’t tell you how many NYSE floor eulogies I have read over the years, starting with Chris Welles book, “The Last Days of the Club,” which by the way was written in the mid ’70s.

Keep up the good work Ray!

Regards,

Bart Ward

by Bart Ward on March 10, 2010 3:40 PM

And I responded:

Bart — Thanks for the good note. I think the stuff they dug up in the construction was more along the lines of the detritus that builds up in your desk drawer over time, not stuff of archival value. But I’ll ask and let you know.

You hit the nail on the head about Amsterdam — our good colleagues work in re-opening their floor to traders gave us the inspiration to re-imagine our floor.

I too have read many premature obits for the NYSE and the floor over the years. I hope to make it to retirement age here, and maybe I’ll throw myself a party and read a bunch of those obits aloud for a toast. Long may the floor run.

by Ray Pellecchia on March 10, 2010 7:43 PM

Bart’s comment about finding neat stuff during the construction stayed with me, and I asked around. In comes this e-mail from my colleague Harry Weber, one of the heads of the NYSE next-generation trading floor project:

The question you asked which came from the comment posted on your blog — I thought about this a bit. We did uncover something I thought was fascinating. It wasn’t in the new booth area, but under [specialist] Post 1, when we were gutting it, stripping the floors and creating swing space [for the floor brokers displaced by the new construction].

I couldn’t figure out what it was at first, and then learned it was the base of the original trading posts that you see in some of the vintage photos. It is hard to tell from the attached photos, but the circular cutout is slightly larger than a manhole cover.

Some may not appreciate this, but like you, I stared at this circular cutout on the floor and imagined this place a hundred years ago!!

Thanks for that, Harry, and for including the photos you had the presence of mind to take before the contractors swept that history away:

How cool is that? Kind of a ghostly image, almost like the outline of the old trading post was etched into history as it was carved into the old wood floor, to be uncovered and reflected on decades later like a time capsule. A reminder of how the marketplace has remade itself time and again throughout its history and is doing so again today.

Harry also included — courtesy of our AMCs (archive-maintaining colleagues) — a photo of what the smaller trading posts looked like back in that day:

I’m reminded of a saying I’ve heard here:

The tape keeps moving, right to left.

Or as Ferris Buehller famously put it:

Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.

I’ve also heard of another artifact being uncovered, and I’m going to check that out and will report back another time. Have a great weekend, my friends.

Somehow I missed a memo and didn’t post the March issue of our U.S. Equities News. Sorry ’bout that!

Articles include:

- NYSE Arca Achieves Sub-millisecond Execution Speed with Universal Trading Platform
- NYSE Floor Undergoes Dramatic Transformation
- Free NYSE Desktop Notices & Alerts Gadget
- ioinet v2: New Innovative Liquidity Discovery Tool
- Changes to the NYSE Close Provide More Interaction and Information
- MSCI Futures Incentive Program
- NYSE Euronext Acquires NYFIX to Significantly Expand Global Offerings
- Upcoming Events: STANY, Options Industry Conference, BSTA, Sifma Tech
- Exchanges Blog (five recent “best of” posts for traders)

Hope you find these useful, and as always we welcome your comments.

Somehow I missed a memo and didn’t post the March issue of our U.S. Equities News. Sorry ’bout that!

Articles include:

- NYSE Arca Achieves Sub-millisecond Execution Speed with Universal Trading Platform
- NYSE Floor Undergoes Dramatic Transformation
- Free NYSE Desktop Notices & Alerts Gadget
- ioinet v2: New Innovative Liquidity Discovery Tool
- Changes to the NYSE Close Provide More Interaction and Information
- MSCI Futures Incentive Program
- NYSE Euronext Acquires NYFIX to Significantly Expand Global Offerings
- Upcoming Events: STANY, Options Industry Conference, BSTA, Sifma Tech
- Exchanges Blog (five recent “best of” posts for traders)

Hope you find these useful, and as always we welcome your comments.

Commissioner Raymond Kelly tours the trading floor.

Commissoner Kelly rings The Opening Bell.

Cathedral High School’s band on the march.

Lucky treats the Street to handfuls of Charms.

From Marisa Ricciardi:

Just in time for St. Patrick’s Day, Lucky the Leprechaun sprinkled a bit of magic on the NYSE as employees received boxes of Lucky Charms (NYSE: GIS). NYPD Commissioner Raymond Kelly, Grand Marshal, rang The Opening Bell with officials from the 247th annual New York City St. Patrick’s Day Parade.

As part of the celebration, parade participants performed on Experience Square, including: Irish Soprano Emma Kate Tobia of Aisling na nGael; Irish step dancers from the Kevin Broesler School of Irish Dance and the Cathedral High School marching band.

The luck continued today as Diageo (NYSE: DEO) rang The Closing Bell and sponsored their annual St. Patrick’s Day party in the Main Dining Room. Revelers enjoyed Guinness, Baileys and Bushmills, as well as tasty Irish treats.

Erin go braugh!

There’s been a lot of press coverage of the first phase of NYSE’s next-generation trading floor, and not to knock any of the video and photos, but I think you’ve really got to see the place in person to take it all in. Maybe we need an IMAX camera or something. But if you know someone who can bring you in for a look — even me — I’d suggest coming in for a peek.

Longtime readers know I’m a fan of traders and trading floors, and that’s why I love this project. By making the physical space and the systems network better for the floor-broker firms, I think it reinforces the value of people in the trading process and highlights NYSE’s distinctive high-tech/high-touch market model.

But beyond that, the remake brings a new vibe of energy and renewal. It hides 70 miles of cable beneath the floor and in doing so peels back time, bringing out the marble walls and windows that were hidden by construction over the years, and inviting the eye upward toward the soaring ceiling, which is 72 feet above the floor.

Look at me — “inviting the eye upward?” — now I’m an architecture critic. Forgive me. But I’ve been here 20+ years, and have rarely seen anything this cool.

In this post I want to give a shout-out to those responsible, and briefly recap the announcement and the accompanying video interview. In a separate post I’ll recap some of the press coverage.

The NYSE Euronext people you’ve seen in the press coverage have been the guys at the top of the chain — Larry Leibowitz, our chief operating officer; Lou Pastina, our exec VP who runs NYSE Operations; and Bob Airo, senior VP in NYSE Ops. Largely unseen except for their good work have been many people in a broad array of groups:

Trading Services
Harry Weber
June Perrine
Dwight Walker
Kitty Bunin

Real Estate and Facilities
Jim Katsarellis
Rich Poliseo
Tony Sultana
Jim LoPiccolo
Martin Murphy
Mark Eidrenkamp

Network Engineering
Rich Mooney
Gerry Lazzaro
Tim Kaminsky

Telecommunications
Steve Monti

Trading Floor Support
Dennis Rosatelli
Hugh Howell
Ron McLeod
Gene Dobaro
Rich Rosario
Kevin Leddy
Livingston Clarke
Glen Blumlein

Marketing
Joyce Smith

Design
Angie Lee at Perkins Eastman

Construction
Gene Magenta and Bill Riordan at Tischman

To that whole team I say: sincere thanks, you’re off to a great start; now quit reading this stupid blog and get back to work on Phase 2!

For me, it’s been great watching the project evolve from the start, and seeing the traders and staff talk about it in interviews. It felt good to write the press release pasted below, and if you click the link to the press release, you’ll see an embedded video interview with Lou Pastina. Good overview from Lou, and good scenes of the trading floor old and new; the price is you have to sit through watching the fumbling interviewer talking to him. Where’d they get that guy? Anyway, enjoy. More to come on this.

New York Stock Exchange’s Next-Generation Trading Floor Goes Live

NEW YORK, March 8, 2010 – The first phase of New York Stock Exchange’s next-generation trading floor went live today, with traders working for the first time from a workspace custom redesigned for the NYSE’s blend of high-tech, high-touch trading.

“We’re creating an environment where brokers can serve customers in multiple markets and multiple asset classes – more efficiently and effectively – right from the NYSE trading floor,” said NYSE Euronext Chief Operating Officer Lawrence Leibowitz. “Our member firms see this as an opportunity to integrate their off-floor and on-floor operations, and locate them at the central point of liquidity and price discovery.”

New Network Supports Brokerage Firms’ Own Trading Applications, Plus NYSE Broker Systems

The transformation provides modern, seated workspaces with room for multiple computer screens, to replace crowded, wooden booths where brokers and their assistants stand elbow to elbow. The project also includes a new, more robust network that supports the member firms’ own trading applications as well as NYSE broker applications. This enables the firms to use the same systems and personnel on and off the trading floor.

The broker workspaces along the two longest walls of the NYSE trading floor’s main room – the east and west walls – are being renovated in phases that began in July 2009 and will conclude at the end of 2010. The project will result in approximately 200 individual broker stations.

The design, by the architectural firm of Perkins Eastman, uses sleek, curved, translucent glass walls and new lighting to brighten the room and recapture the marble walls and original windows that were obscured earlier.

The project also includes streamlining the large, circular desks throughout the trading floor where the designated market makers are located, as well as updating the electronic wallboards into color, high-definition, flexible-content displays.

Strong Interest and Participation

The new spaces in the main room already are oversubscribed by member firms wishing to participate. Some are existing NYSE member firms that are expanding their presence on the trading floor, while others are firms looking to establish a new presence. Discussions are underway about the possibility of extending the project into another room of the trading floor known as “the garage.”

Floor brokers are one of three core liquidity providers in the NYSE market model; the others are designated market makers and supplemental liquidity providers. There are approximately 100 NYSE floor broker firms, which accounted for 156 million shares of NYSE daily trading volume on average in January 2010. Nearly 60 percent of floor brokers’ trades were liquidity-providing (as compared with liquidity removing) in January 2010.

In addition to their activity on the NYSE trading floor, approximately 60 percent of the floor broker firms are permissioned to trade in other venues and financial products from the NYSE trading floor.

Floor brokers differentiate the NYSE market model by blending sophisticated automation – such as uniquely engineered algorithms in their hand-held order-management systems – with human expertise and value-added service to offer a highly managed solution for a very large and diverse community of customers.

Ongoing Transformation

The remake of the main room of the world’s best-known trading floor is the latest major component of an ongoing transformation at the NYSE Euronext in New York, including:

• Adopting in 2008 the high-tech/high-touch market model, providing customers with the benefits of both fast, automated trading and value-added human interaction to add liquidity and dampen volatility;
• Upgrading NYSE trading systems to improve speed, capacity and functionality – round-trip latency has decreased from 350 milliseconds in 2007 to 3 milliseconds currently;
• Following NYSE Euronext’s acquisition of the America Stock Exchange, moving the renamed NYSE Amex’s equities and options businesses into other areas of the NYSE trading floor in December 2008 and March 2009, respectively, and reinvigorating their competitive positions with new technology; and
• Planning to trade Nasdaq-listed issues for the first time from the NYSE floor, under the NYSE Amex platform, pending approval from the Securities and Exchange Commission.

In the video embedded above from this morning, NYSE Euronext Chief Operating Officer Larry Leibowitz and Meridien Equity Partners’ Senior Managing Partner Jonathan Corpina talk with CNBC’s Scott Wapner about the NYSE’s next-generation trading floor, the first piece of which is visible for the first time today.

A couple/three key points:

• Larry says the project provides a better blend of people and technology. Brokers get a better network so they can do the same agency business from the NYSE trading floor that they currently do off the floor, also called “upstairs.”
• Jonathan says it will enable his firm to consolidate its off-floor and on-floor operations, bringing its liquidity provision under one roof — onto the floor, with its value-added trading tools. The result, he says: better trade executions for customers.
• Larry adds that it will position floor brokers to better compete and grow.
• OK, permit me a fourth point: The new space looks unbelievably great, recapturing the beautiful old marble, windows and architecture of the place even while adding the latest in broker workspaces and systems. Props to all of my colleagues involved with the project.

More to come on this. Hope you’re having a magnificant Monday.

So I was on the trading floor at the close today, on the outskirts of the big crowd in Berkshire Hathaway, being all serious, trying to stay tuned to the huge closing auction in BRK.A and BRK.B upon the latter’s going into the Standard & Poor’s 500 Stock Index for the first time, figuring I’m going to put up a big serious blog post about how well the auction worked.

At which point I look up and there’s Goldie Hawn and Kurt Russell, hard to know who’s more beautiful between ‘em, or friendlier, and they’re being walked around the floor by Art Cashin, full-time market sage and no better part-time tour guide.

Which is something you don’t see every day.

And Goldie and Kurt, who did not tell me it was OK to to call them by their first names but I think it’s OK because I was literally this close to them, are having a great time. Kurt is shooting Goldie with his phone cam. Which is against the rules of the floor, but hey, who’s gonna yell at Kurt Russell? And floor brokers are showing Goldie how they’re working orders on their hand-held order-management systems, and G and K are checking out the big crowd in Berk and they’re eating it all up and talking and laughing with everybody and having a great time. Apparently they’re friends of CNBC’s Maria Bartiromo, just here for a visit, and Maria’s standing between them in the pic above, and that’s Art of course in the background on the left, and when I get home I have to explain to my family how as always I’m not in the picture with the visiting famous people, because just as I was about to turn to say hello to Goldie or ask her how many shares of Berk she owns or toss out some other brilliant conversational gambit, I got bumped out of the way by a TV cameraman, who was doing one of those walking-backwards shots. Another unrecorded near-brush with fame.

They’ll just have to take my word for it.

Anyway, I get upstairs after the close and start writing the serious piece and my boss comes in with the photo and asks if I can put it on the blog. And I think, hey, it’s Friday night before a three-day, Goldie still has that smile, the serious can wait a bit. Gotta have some fun sometimes, right?

Have a great three-day, my friends.

We announced today that GETCO LLC is expected to become a designated market maker (DMM) on NYSE, and that GETCO has purchased approximately 350 NYSE DMM assignments from Barclays Capital.

This is a very positive and important development for NYSE and our communities of traders and issuers and their investors. Here’s why:

• The firm is a major participant in more than 30 markets around the world, and has an excellent track record of deploying market-making expertise and technology. Its broad market participation also gives it a wealth of insight with which to serve issuer customers.

• GETCO is well known to us, as a participant in several of NYSE Euronext’s markets, including NYSE (as a supplemental liquidity provider), NYSE Arca (as a lead market maker), NYSE Arca options and NYSE Liffe. They also will be joining our planned program to trade Nasdaq issues on our NYSE Amex platform, also as a DMM.

• To have a firm of GETCO’s caliber step up its participation in our market by joining our outstanding group of DMMs is a validation of our high-tech, high-touch market model.

The new year has brought with it a sense of renewal and reaffirmation for NYSE. New participants are joining the market. Within the next few weeks, we’ll implement significant enhancements to the close of trading (blogged here, updated here). We’ll unveil the first leg of our NYSE next-generation trading floor, with a more robust network and top-flight workspace to better enable brokers to particpate in our market and other markets effectively and efficiently, right from our floor. That would be followed by the planned trading of Nasdaq issues on NYSE Amex.

Will be posting more on these topics in the coming weeks.

Here’s the press coverage we’ve seen to date on today’s news.

• High-speed trader GETCO becomes Big Board player (Reuters)

• High-Frequency Trader Getco Becomes NYSE Market Maker (WSJ)

• Getco to become NYSE market maker - (FT)

• Quick View: Getco goes back to the floor - (FT Trading Room)

• Getco Buys 350 Designated Market Maker Slots at NYSE (Bloomberg — no link)

• NYSE to Add GETCO as a Designated Market Maker (Securities Industry News)

• Out With the Old, In With the New (Forbes)

Have a good night, folks. Unanswerable questions of the day: During yesterday’s near-blizzard in NYC, the snow was blowing in my face as I walked to work in the morning. Well, I figured, at least the wind will be at my back on the way home. No such luck. The wind was in my face again as I walked home in the opposite direction last night. Seems to happen every time. Is this Murphy’s Law of wind? What gives? I mean, I’m not paranoid, I just think the weather is out to get me.

I was out on Friday,giving myself some extra time to prepare the bathtub of guacamole I chipped down by myself watching the Super Bowl, so I’m just catching up to this notice alerting traders that the changes in NYSE’s closing auction will be introduced on 1 March, not 22 Feb. as we announced previously.

The extension of five business days is designed to give the community more time to make the necessary system changes. I understand from colleagues that many of you are swamped right now with the upcoming changes in options symbology, among other things.

Hope that you’re having a marvelous Monday, and that if you’re snowed in somewhere, it’s a place where you want to be snowed in. The treasure trove of historical trivia is a little thin for today, so how about this quote picked up from my Standard & Poor’s daily calendar:

My formula for success: Rise Early. Work hard. Strike oil.
– John Paul Getty