The COVID-19 pandemic has forced bourses like the New York Stock Exchange (NYSE) to close their trading floors and had made them rethink about the need for such spaces.
On 23rd March, the NYSE closed it’s stock and options trading floors in New York and San Francisco, after some traders and an ICE employee was tested corona positive.
Companies like Cboe Global Markets Inc and Nasdaq Inc also closed their options and futures pits in Chicago and Philadelphia. Whereas trading is considered that won’t happen as well.
While Cboe aims to reopen its trading options from 1st June stating that some of its customers were frustrated by the exchange’s electronic trading tools and were unable to get the riskiest and complex types of orders completed.
The NYSE is the only US exchange that operates stock trading floors along with electronic trading. In the recent study, it showed that floor traders dampen volatility as they provide tighter bid-offer spreads and save millions of dollars a day.
According to an analysis released by the industry trade group, the Securities Industry and Financial Markets Association the closure of trading options has not led to a significant drop in market share. But the investor’s experience will tell the difference between virtual interaction and human interaction as time passes.
Being the world’s largest futures exchange CME is unclear about the idea of reopening its trading floor. As the closure had little effect on its trading activity.
While Sean Tully, a senior managing director at the exchange made it clear that the participants can trade any strategy at present as easily as they could before the closure of the floor.