Photo - Ashlee Rezin/Sun-Times
“If you go back to the 1970s, 1980s and 1990s, to the days of physical traders in pits, those folks had that machismo kind of approach to trading that was almost like a locker-room environment,” he said. “It really was nothing like the type of technology-driven, model-driven and information-driven trading that we have nowadays.” - Luc Fortin, global head of trading for TMX Group
Yes, but...
Trading today occurs at the speed of light, even though it's largely in the shadows. Anonymity means insiders can front-run clients. Order flow is captured and channeled to specific traders at the expense of potential better prices in the open market. Predatory computer algorithms prowl the markets sniffing out large orders, executing small trades to see if such orders automatically follow, tipping their hand.
In the days of 'physical traders' you had the two most important aspects of an equitable market -- discovery and disclosure. Buyers/sellers would canvass the market without indicating which side of the market they were and floor professionals would provide continuous, two-sided markets. Such a marketplace largely prevented gaps in pricing and further, assigned responsibility on professional traders.
Sadly, the markets have been taken over by the banks, who have engineered every possible advantage they can conceive of to maximize their profits. Equity trading is a zero-sum game: they win, you lose.
And yes, I was a 'physical trader in that locker-room environment' for over 30 years. Traders lived on their honesty and their word was their bond. Anyone who didn't stand behind their word became 'invisible'.
