Nasdaq plans to reopen its only live securities-trading floor, in the FMC Tower above the Schuylkill in University City, on June 1.
The move comes 11 weeks after the New York-based global trading network darkened its offices and shifted stock-options trading from the sometimes-lively “crowd” in the 6,000-square-foot tower trading floor to an automated center in South Philadelphia, and then to traders’ home networks, as Wall Street adjusted to working in the midst of the coronavirus.
Returning traders will wear face shields and masks, and instead of mingling in an open area, they will sit near their desks and yell trades into microphones, said Kevin Kennedy, senior vice president of North American markets. He joined the Nasdaq operation after the New York-based electronic market bought the old Philadelphia Stock Exchange, the nation’s first, in 2005.
Nasdaq’s restoration of the “open outcry” floor will follow the return of traders to BOX Options Market in Chicago earlier this month. The New York Stock Exchange is to reopen next week.
The March closing, after Mayor Jim Kenney urged employers to shut until they could ensure workers’ safety, “put our clients and employees first, for the public’s safety. It was a tough decision, but we knew it was the right decision,” Nasdaq’s Kennedy said in an interview Tuesday. The Inquirer first reported the planned closing on March 11.
Most stock and options trading has been conducted online since the early 2000s, when electronic networks made it possible for “upstairs” firms to trigger trades without sending squads of bright-jacketed traders onto stock market floors looking for the best prices.
But options investors still prefer human handling to ease large orders into the market without disrupting prices, traders say.
“As things have started to improve across the country, we want the independent market-makers and specialist companies that provide liquidity for Nasdaq, and are the heart and soul of the exchange, to get back to work,” Kennedy said.
Many of Nasdaq’s and its member firms’ 200-plus employees who normally staff the FMC offices will remain homebound. Kennedy expects about half the usual 75 or so brokers, who buy and sell stock options contracts, market-makers whose guarantees ensure that those trades are done, and Nasdaq risk, systems, and market surveillance employees will return June 1, with more to follow as volume rebuilds. Options sales permit investors to seek gains (or risk losses) for a fraction of the price of owning stock.
Nasdaq officials say they were well-prepared to go online. “We actually gained market share” during the shutdown “because we are that good electronically,” said Kennedy, citing industry data from the Options Clearing Corp.
Kennedy said the company took steps toward a safer environment that will include protective equipment and spacing, daily temperature scans, and a daily questionnaire on personal contacts. Contact with people not known to be “COVID-free” will result in forced time away from the trading floor.