The New York Stock Exchange

by Robert Wood - Sociologist
Take a Time-jump back to 1973 in this information leaflet to the public. It is difficult to imagine trading without computers and the Flash Crash.

 

The trading floor of the New York Stock Exchange is about two-thirds of the size of a football field. Orders to buy and sell shares in companies listed on the Exchange come to the floor through their brokers from people in all parts of the country and overseas. * Source: The New York Stock Exchange presentation leaflet with data complied as of April, 1973

NYSE 1973

The stocks of over 1,500 different businesses are listed on the Exchange These are among the nation’s leading corporations. Their names, and their products of survives are, in many cases, household words.

   The questions asked most frequently by visitors seeing the floor for the first time is:

”What are those horseshoe-shaped structures?” They are trading posts. There are 22 in all – 12 on the main floor and 10 more in the annexes.

   About 85 stocks are assigned to each of the 22 posts. Each stock is located at a particular section of the post.

   At Post No. 6 some of the stocks are: Boston Edison (BSE), Flying Tiger Line (FLY), Marcor, Inc., M. Miles Lab Inc (MIL), Royal Dutch Airlines (KLM), United Brands (UB), Walt Disney Proc. (DIS).

   Some of the stocks of Post 8 are: American Airlines, Inc. (AMR), Boeing Company (BA), Eaton Corporation (ETN), General Tire & Rubber Co. (GY), Northeast Utilities (NU), Phelps Dodge Corporation (PD), Safeways Stores, Inc. (SA), Timken Co, (TKR), Union Oil Co. of California (UCL).

Bond tape

Over 2,100 bonds are also listed on the Exchange. The Bond Room may be viewed from the Exhibit Hall. Listed bonds represent obligations of leading U.S. and foreign corporations, the United States Government and many foreign governments.

The “900” ticker

Transactions on the New York Stock Exchange trading floor are printed promptly on the nationwide ticker network. There are about 12,000 tickers and ticker displays in about 900 cities in the United States, Canada and overseas. The names of the stocks are abbreviated on the ticker tape…

Times are a changing

Companies live, die and merger, but ticker symbols are still the norm. November 2018 two of the above mentioned companies at Post No.6 are still listed. Royal Dutch Airlines has gained another letter and is listed under KLMR. Disney has changed name from WD Production to WD Company, but is still listed under DIS.

   It’s up to you to check up on the companies mention under Post No. 8 if you find this kind of information interesting.

How an order comes to the trading floor

People place their orders to buy and sell with the local office of a Stock Exchange member first; the orders are then wired to the New York offices of these member firms, or to their New York member firm correspondents which telephone the orders to the trading floor of the New York Stock Exchange.

The annunciator boards

The large wall boards at each side of the floor are used to notify floor members of incoming orders. As orders are received by a firm’s telephone clerk in his booth beside the trading floor, he signals his firm’s floor member on the annunciation boards by pushing a button next to his phone. The member then goes immediately to the booth. Only members may execute orders.

Prices

The old law of supply and demand determines stock prices. When most people want to buy, prices rise. When most people want to sell, prices decline.

   Let’s say you instruct your Member Firm to sell “at the market” – which means the best price obtainable by your broker when your order reaches the trading post. Chances are that somewhere somebody has instructed his Membership Firm to buy the same stock.

   Messages from the two firms are received by their brokers on the floor. They meet at a post where the stock is traded. There, each of the brokers tries to get the best price for his customer. A price is arrived at and a record of the transaction is published promptly on the ticker.

   The buyer might be an individual. Each day thousands of people buy and sell shares in companies listed on the Exchange. Or your buyer could be an Exchange member called a specialist. One of his functions is to help maintaining a fair and orderly market for stocks assigned to him. This is why within practicable limits he frequently buys and sells stock to narrow any unusual gap between the lowest price at which anyone will sell and the highest price anyone will pay. In this way the specialist may help your transaction to be made quickly and at a better price.

How transactions are reported

Reports of transactions are flashed electronically from the floor to the computer system and ordinarily appear on the ticker network within seconds. The “900” ticker, named for the number of characters it can transmit in a minute, is the pulse of the market. Without it, the market on the Exchange’s floor scarcely would be possible. Successive transactions throughout each day weave a “price pattern” that “makes the market”. There is o secrecy about prices. The ticker tells people from minute to minute the prices at which shares in America’s leading companies listed on the Exchange are bought and sold.

Facts and figures

There are 1,366 members of the Exchange. Many are partners of member firms, or officers of member corporations of the Exchange total 558. More than 3,300 people are on the trading floor.

   In the U.S, 3,800 member firm offices in 1,200 cities help people purchase and sell stock. There are also 273 offices in 23 foreign countries.

   More than 4,100 different stocks and bonds are listed on the NYSE. The unit of trading is ordinarily 100 shares in stocks and $1,000 par value in the case of bonds. An odd lot in stocks is ordinarily 1 to 99 shares, in bonds less than $1,000.

   Costs of buying and selling securities on the NYSE through a member firm are among the lowest for any transfer of property. They average roughly 1,5 % of the dollar value of shares bought ad sold. Early in 1973, America’s shareowners totaled an estimated 31,700,000, including those owning mutual funds. At that times, it was also estimated 15 of every 100 Americans were shareowners.

   Eight out of ten of the more than 1,400 common stocks listed in the NYSE paid cash dividends last year (1972), and almost 700 have paid dividends every three months for 20 to more than 100 years.

The ten most widely owned companies

American Telephone & Telegraph (T), 3,010,000 shareholders, General Motors (GM), 1,291,000 shareholders, Exxon Corp (XON), 783,000 shareholders, General Electric (GE), 514,000 shareholders, General Telephones & Electronics (GTE), 447,000 shareholders, U.S. Steel (X), 342,000 shareholders, Ford Motor (F), 340,000 shareholders, RCA Corp. (RCA), 308,000 shareholders, Texaco Inc. (TX), 300,000 shareholders. (Early 1972). *

*Source: The New York Stock Exchange presentation leaflet with data compiled as of April, 1973.

If you are a trader or inclined to gamble on stocks and gold, you might find  this short story entertaining.

The Curse of the Gold - The sheer cliffs of dark economic futures closed about the Investor like the sides of a trap. He did not like the way their jagged peaks loomed against the few faint numbers which glittered like the eyes of spiders from the dual computer screens.
   Neither did he like the chill, uneasy numbers that seemed to whistle across the black Logitech keyboard and prowl among his papers on the desk.
  – Do I disturb the profound meditations of the nobly successful Investor Dresden? purred a soft voice.
Crime, Comics and Tales from the crypt