Oh yeah, the New York Stock Exchange, while the epicenter of the trading universe, is more like an amusement park or a playground, right? Close your eyes and you can imagine, the hustle, bustle, merchants screaming on the ground, grown men sweating in suits and buttoned shirts gesticulating like a herd of wild children playing football in an open field.

But why, in these modern times and times, do traders and brokers still act like an angry mob? Don’t we use computers for most trades these days anyway? Isn’t this the information age, an age dominated by instant and sterile communication? How did this madness start? Why is it still going on? This article will examine and explain the reasons why Wall Street and many other commercial pits are more like a riot after a football game than a gathering of big businessmen trying to amass a fortune for themselves and their clients.

First of all, there are a number of trading exchanges and trading pits, from the bond pits in Chicago to the Nikkei in far away Japan, but the world’s most famous trade exchange undoubtedly exists at the intersection of Wall Street. and Broad Street in Manhattan. The New York Stock Exchange (NYSE) had been around since 1792, when 24 New York brokers and businessmen signed the famous Buttonwood deal. Most people think of the Dow-Jones Exchange when they think of the stock market. It consists of thirty of the largest companies in the United States, from GE and McDonald’s to Walmart.

The principle is simple; people use stockbrokers to buy shares, or percentage of ownership of a company (and its profits or losses) in exchange for cash. Money is and has always flown across the room at a fast and furious pace, and so has the action, hence the total fuss. These shares are essentially “auctioned” to the highest bidder who accepts a buy price, so each broker is trying to get their offer and be accepted before the share price rises. This is where the screams originated, with brokers trying to yell their price and acceptance as high as possible in an attempt to drown out and beat competing brokers for the purchase price they want. Getting a fraction of a second early offer at pennies a share can mean the difference between millions of dollars of profit on a large stock purchase, so the immediacy and force used can be understandable when the stakes are high.

Originally, the tone of the room was more chivalrous, as respected businessmen and brokers traded stocks at a reasonable rate and wealth simply moved among wealthy people, family to family. A Rockefeller could buy a Ford part or a Vanderbilt interest, knowing that these rich and successful men would generate more wealth.

Yet as America grew and the American Dream was born, ordinary people wanted to get in on the action. After the Industrial Revolution took place in America in the late 1800s, a middle class emerged as factory workers struggled to get more of the company pie and eventually won better wages and better working conditions. The idea that any American could get rich and rich quickly took hold, and what better way than through the New York Stock Exchange.

In the 1920s, many Americans were investing in the stock market. The New York Stock Exchange was booming. Instant millionaires were popping up everywhere. There was a whole new level of wealthy Americans with ticker tape machines in their living rooms that provided them with instant market price updates. That’s when the screaming and gesticulating began in earnest, as brokers were overwhelmed by buyers, new customers, and purchase orders. They yelled and screamed and waved their arms to receive his orders first. The country’s position was positive. The era was known as the Roaring Twenties, and its main theme was Blue Skies because it was all coming down to pink for most Americans. Consumer credit was born to help sell products that are produced in excess thanks to a massive stock. The only problem was that this whole explosion of wealth was based on a house of cards almost like a Ponzi scheme. Stocks were being sold for start-ups that weren’t making a profit, they were just filling their coffers with investment cash, and too many people were fully leveraged in the stock market. For 9 years, from 1920 to 1929, stock prices went straight up with no end in sight.

That is until October 24, 1929, better known as Black Thursday. That was the day of the Great Stock Market Crash that ushered in the Great Depression, the greatest economic catastrophe America has ever faced. The pits exploded with noise as runners yelled “sell, sell, sell”, trying to cut losses before it was too late, but there were no buyers. Investors fled in droves, most of them bankrupt, penniless and penniless.

Nonetheless, the New York Stock Exchange persevered and, as with any stock market or market, it has had turbulent ups and downs ever since. There have been a number of peaks and valleys on the New York Stock Exchange over the years. The most recent crash occurred in 2008 after the housing bubble burst. The market is still recovering. Numerous regulations have been put in place to make trade fairer and more acceptable. Day traders trade from their home computer indicates that they buy and sell in an instant. In fact, most transactions are done through computers these days.

So why do grown men in suits keep yelling, yelling, and gesticulating like a five-year-old throwing a tantrum? That’s the one thing that never seems to change.

Because at its core, the New York Stock Exchange is still an auction house system, and every DOW trade happens at the end on that famous floor. Even if you make a purchase on E * Trade, the exchange is accepted and consummated on the floor of the New York Stock Exchange, facilitated by a broker. The yelling is not as necessary, or as frequent as in the past, thanks to computers and technological advances in communication systems, but there are still runners in the room who have to beat the competition with their fists. In fact, hand signals are more important to stockbrokers now, so they can quickly signal the floor specialists who place the actual buy or sell order. That explains all the crazy gesticulations.

“Orders come through brokerage firms that are members of the exchange and flow to floor brokers that go to a specific place on the floor where the shares are traded. At this location, known as the trading post, there are a specific person known as the specialist whose job it is to match buyers and sellers. “

By using obvious and wild gestures and yelling when necessary, so the order can be heard, brokers communicate with their own partners these days, not so much with the auctioneer. The noise and fury become so loud the moment the massive old chaos rears its ugly head and to a stranger it seems as if a rugby scrum has been unleashed. In fact, it simply means that a large number of operations are happening before your eyes and to the detriment of your ears.

The day will probably come when all is quiet on the New York Stock Exchange, but it certainly wouldn’t be as entertaining. However, in all likelihood, there will always be human traders on the floor making sure your transaction goes through, and that will always mean yelling and hand signals. So now you know, the next time you see a frenzied video clip of the New York Stock Exchange, brokers aren’t practicing to become professional or political fighters. They are not learning how to guide an airplane down the runway or imitate their favorite NFL head coach on the sidelines of a close soccer game. They are just trying to make money or save money for their clients. If you happen to be one of those clients and your money is at stake, even if you only have a 401K or a retirement fund, you might think these transactions are worth shouting about.

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