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Originally published: August 2007
Original link:
http://advancedtrading.com/photos/trading-floors/phlx/showGallery.jhtml?galleryID=24
The Philadelphia Stock Exchange, created
in 1790, was the first U.S. stock exchange. And in 1975, the exchange
became the first regional exchange to trade equity options. The PHLX began
as a floor-based exchange, trading via an auction market. It has evolved
into a hybrid market with the AUTOM--Automated Options Market system which
was introduced in 1988. AUTOM, which is still used today, was created to
allow electronic delivery of option orders from member firms to the
exchange floor, automatic execution of certain orders, and electronic
confirmation of orders. The system has been through numerous upgrades and
has changed dramatically since 1988, but is still the primary automated
execution system used on the floor today. The PHLX no longer has an
equities trading floor, which was once adjacent to the options floor.
Equities are now traded solely electronically via the exchange. The
Philadelphia Stock Exchange will most likely face more changes ahead, once
its planned acquisition by Nasdaq is completed. This photo gallery
takes a look at the technology and structure of the options floor, which
has undergone tremendous change over the years, and will probably endure
further changes with the pending acquisition.
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Entering the Philadelphia Stock Exchange
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As you enter the Philadelphia Stock
Exchange trading floor to the left is the help desk which handles
customer service, support and surveillance for the floor and for other
users. Beyond the help desk is the options trading floor where index
options are traded. There are approximately 250 people on the floor,
says Bill Terrell, First VP of Market Operations at PHLX. "We used to
have about 800 on the options floor," he adds, noting that electronic
trading has reduced the need for that number of physical bodies on the
floor.
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PHLX Floor and
Help Desk
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Specialist firm Susquehanna International
Group at work on the floor of the Philadelphia Stock Exchange. AUTOM
(Automated Options Market), which was first introduced in 1988, offers
automated execution functionality. Terrell notes that this system has
gone through "a tremendous amount of changes" over the years. "AUTOM
is the order delivery system that all the firms hook up to, to deliver
their orders the exchange. The order(s) come into our options system
and are routed directly to the specialist post(s) where they are
traded." He adds, "They automatically execute and, if they are between
the market and not executed they are posted."
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Specialist Firm
Susquehanna
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Market Makers
The market makers, pictured here, all use
their own proprietary systems."It's up to them what systems they want
to use," Terrell notes. Generally they bring in various market data
feeds, he adds. He notes that the market makers use their own hand
helds, but these aren't as prevalent as they once were. "They are
trading so many things now that they need larger screens," he adds.
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Floor brokers and
Citadel on the Philadelphia Stock Exchange floor
Floor broker booths line the windows of
the floor. Adjacent to the booths is specialist firm Citadel.
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Options Floor
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Options
trading
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Wallace
Securities
This is the FBMS, Floor Brokerage
Management System, on the options floor of the PHLX |
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Brokerage
Management System Being Used by Wallace Securities
Leo Flaherty, vp, DSX/Wallace Securities,
a Philadelphia Stock Exchange floor broker, discusses how orders come
in. He says, "Our customers, UBS, Citigroup, etc, call us with an
order and we either put it in the FBMS or take the order to the crowd.
If it's a complex order, we're more likely to bring it to the crowd."
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Wireless on The
Philadelphia Stock Exchange floor
Floor brokers, specialist and market
makers all have the option to work wirelesses (see wireless antenaes
on the ceiling). However, Terrell notes that almost everyone went back
to being tethered in because of speed. Miliseconds matter on the
floor, and systems were slower when they are wireless." |
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Floor Broker
Merrill Lynch
Chris Beck, Director, Merrill Lynch, has
been a floor broker for 33 years. He came to Philadelphia from the
CBOE in 1981. |
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Merrill Lynch
Screens
Beck, a floor broker at Merrill Lynch,
says he uses the MLX proprietary trading system to send orders to the
exchange. His left screens show Reuters market data and quotes. He
adds that a lot of the orders come in through Merrill's Instantant
Messaging system, approximately 20%. |
See other exchanges and trading
floors:
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