He was at his post on Sept. 11 2011 when terrorists flew planes into the twin towers of the nearby World Trade Center, part of a co-ordinated assault on the US that killed nearly 3,000 people that day. “That was a bad day. All of us here were lucky to get away, but the NYSE is a tough institution,” he said.
The NYSE, the biggest stock market in the world with $21 trillion of stocks on its Big Board, regularly witnesses contrasting scenes of euphoria and tragedy. Last month it saw a string of foreign companies coming to market in initial public offerings (IPOs).
In one week alone, it listed Best Inc., a Chinese logistics company backed by the e-commerce giant Alibaba, valuing it at $4 billion. The following day, the bell rang for Despegar, an Argentinian online travel company, with a price tag of $2 billion.
The jubilation was plain to see for the founding executives of Despegar as they celebrated from the balcony of the exchange when trading in their stock opened. They had successfully got their company listed on the world’s most powerful stock exchange, and had made millions of dollars in the process.
If Saudi Aramco, the Kingdom’s oil giant, were to choose NYSE for its planned IPO, it would dwarf either of those. Indeed, with potentially $100 billion of shares up for sale, it would make even the biggest IPO in history — the $25 billion raised by Alibaba in 2014 — seem relatively small.
What would the market maker, a native of New York City, think about Aramco listing on his beloved exchange? “We know they are the biggest oil company in the world, so it would be great if they came to NYSE. The exchange is all about doing business, and that’s what Aramco would bring for us,” he said.
Market people have been doing business on the site in lower Manhattan since 1792, but the NYSE was formally constituted in 1817 at the height of the Napoleonic wars in Europe. Crashes and panics came and went with predictable regularity as the era of ticker tape gave way to computers and online trading.
Since 2005, the number of physical traders on the floor has dwindled, as has the brokerages they represented. Back then, there were about 2,000 brokers serving investors, now there are about 700.
Rather than open outcry at trading pits, the floor of the exchange is now dominated by hi-tech booths, served by traders equipped with electronic tablets to record trades and deals. “I’m one of the few humans left here,” the market maker quipped.
But, unlike other exchanges where business has moved exclusively online, there is still a big physical trader presence on the NYSE floor. The market maker’s job is to ensure orderly trade even in volatile times — such as the first day’s trading of an IPO — by smoothing out demand and supply for stock with which the market may be unfamiliar.
“There is a human element in the NYSE you don’t get elsewhere. If we cannot judge the price of a stock on opening, we are not in a rush to open it. We want to get it right to ensure a proper market,” the market maker said.
His services were required the day of the Despegar IPO, when trading was delayed 30 minutes beyond the bell to ensure a stable opening. “We have a responsibility to ensure orderly and liquid markets,” he said.
Little throws him out, it seems. As we talked, the screen behind him flashed up the headline “Dow Jones hits new record high,” meaning another peak reached in booming US equity markets.
“That’s nothing, we see it every day,” he said.