Page 51 - THE MARKET WHISPERER

THE MARKET WHISPERER 49

Meet the Stock Exchanges

The stock markets are comprised of several stock exchanges. A stock
exchange is a business like any other. It makes a profit from commissions
and services. The stock exchanges compete among themselves, appealing
to different business niches. Each stock exchange has its own uniqueness,
technology, advantages, and of course, its typical disadvantages.

The New York Stock Exchange (NYSE)

The NYSE (www.nyse.com) is located on the corner of Wall and Broad
Streets. It is the largest in the world as far as the market value of the
companies traded on it. The market value, known as market capitalization
or “market cap,” multiplies the number of shares of stocks held by the
public by their stock exchange-traded price. If you calculate the market cap
of stocks traded in the NYSE, you will reach a peak period combined value
of more than ten trillion dollars! More than 3000 companies comprise the
NYSE trading list.

Prior to the terror attacks of September 11, 2001, it used to be possible
to stand at the stock exchange’s gallery window and watch it in action. Now,
to enter the gallery, you need to get a special entrance license, or become
a photographer for CNBC, Bloomberg or others, or know someone with
a key function who can request a permit for you. But once in the gallery,
you’ll see something amazing that is part of a disappearing world. Traders
scurry among dozens of work stations, broadcasting commands with
odd hand signals, and navigating their way through mountains of notes
transferred from buyer to seller and carelessly let to fall on the trading
floor.

Because I was acquainted with the well-known television commentator
who goes by the name “Dr. J,” I was lucky enough to receive the amazing
chance to join a CNBC photo shoot of S&P 500 options traders in the Chicago
Stock Exchange. I stood, fascinated, surrounded by dozens of traders
shouting and pushing as though in a football game. Later I learned from Dr.
J, a former pro-football player, that one of the conditions of acceptance for
work on the trading floor known as “pit” is the height, weight, and physical
ability to push aside competing traders!