NYCWithin the New York City regional media market there are no less than three full-time financial news television channels. At any given time, one or more of these business networks will be broadcasting live from the trading floor of the New York Stock Exchange. The site of the largest and most important stock market in the world seems likes a proper setting to conduct such business simply because of its iconic status. The very name of it invokes images in the mind’s eye of frenetic traders shouting out buy and sell orders across a noisy trading floor littered with tiny slips of paper. The truth regarding what really takes place on the nation’s trading floors is actually quite surprising.

Owing to advances in and the ubiquity of electronic trading, the day-to-day lives of those denizens who amble about the floors of our physical stock markets are today radically different than we might imagine. For starters, there are now far fewer of them. Indeed, the floor of the New York Stock Exchange itself has been wholly transformed from a bustling marketplace for stocks and shares into something resembling a television studio where newly-listed corporations come to garner some eagerly sought after “face time” in front of the financial news television cameras. The consequences of this evolution in our way of trading financial instruments has led to the depopulation of the floor of the New York Stock Exchange, and the rendering of millions of dollars’ worth of fancy technical equipment into little more than theatrical stage props. When one tunes into the financial news on television these days they are frequently shown images of the vastness of the New York Stock Exchange floor. When observed, it’s impossible not to notice how scant few people actually work on the floor.

All of this change has been brought about by electronic trading, corporate acquisitions, the after-effects of September 11th, and the march of time. The New York Stock Exchange is presently managed by NYSE Euronext, an organization formed by the 2007 merger of the exchange with Euronext N.V., a fully electronic stock exchange headquartered in theelectronic-trading Netherlands. Before that, the New York Stock Exchange stood in the canyons of Wall Street for more than 210 years, and was the dominant marketplace for equity trading in the world. What’s different now is the way in which electronic trading platforms have changed the way buyers and sellers of financial instruments do business.

When the costs of storage and high-speed transfer of data started to go down, electronic based exchanges such as the IntercontinentalExchange, Inc. moved an increasing amount of their trading off the floor and onto electronic platforms. In the process, they created a radical new financial frontier. How radical? Today, a very substantial percentage of all common stock trading in the U.S. takes place in an unremarkable looking warehouse situated in an industrial park somewhere near the New Jersey Turnpike.

In most of the world’s markets, all but a token amount of stock trading is transacted by computers negotiating with other computers at unimaginable speeds. When these black boxes took over, our markets became much more efficient. Trading costs have tumbled, and volumes have soared. For good or for bad, everyone on earth who has a pension or owns mutual funds has a stake in this new technology dominated landscape. Experts disagree as to whether this situation represents the optimized state of our use of resources, or if our reliance on such technology is getting out of control. Future debates on the subject will likely question the wisdom of having so much of our global economy and risk concentrated in one small place.