By Jenny Surane and Lananh NguyenIts time for Wall Streets coders to shine.The biggest United States banks will spend the weekend making changes to trading algorithms.
They are preparing for the New York Stock Exchange to close its trading floor on Monday and move to fully electronic trading as the coronavirus spreads.Firms will disable connections to the physical NYSE floor and carry out tests to ensure electronic trading goes smoothly.
The exchange will enable the banks to hold tests from 8:30 to 11 a.m.
New York time on Saturday, it said in a notice to traders.
An NYSE employee and a person who worked on the floor tested positive for the virus this week.Wild swings in equity markets and thousands in the financial industry working from home have led to questions about whether stock exchanges should remain open.
Top regulators -- including Treasury Secretary Steven Mnuchin and Securities and Exchange Commission Chairman Jay Clayton -- and executives of exchange firms have come out in favor of keeping markets open.That poses a particular challenge for the storied NYSE trading floor, which hosts designated market makers.
The specialists, as theyre known, typically facilitate activity in five to 10 stocks each.
They display their best bid and ask prices during trading hours and also step in with their own capital to reduce volatility if there isnt a sufficient market for a security.While 80% of cash equities trading is electronic, dealing with specialists is still popular during periods of trading imbalances or instability.For the most part, bank dealers arent concerned about adapting to life without a trading floor.
Theyre used to electronic trading in venues operated by NYSEs main competitor, Nasdaq Inc., as well as CME Group Inc.
and others.
Still, market participants want to make sure that operations run smoothly, particularly during NYSEs opening and closing auctions.NYSEs trading floors provide unique value to issuers and investors, but our markets are fully capable of operating in an all-electronic fashion, NYSE President Stacey Cunningham said in a statement Wednesday.
We continue to firmly believe the markets should remain open and accessible to investors.