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Large Institutions taking over America? Or the passing....

by James Denison / August 2, 2004 4:03 PM PDT

....of an era. Admittedly this faster, computerized form of stock trading is done around the world in other markets and here at home on the NASDAQ. Many small, individual traders would say NASDAQ has offered them greater movement for loss or gains than the NYSE historically has.

Will these changes be better for everyone, or best benefit the larger financial institutions and mutual funds organizations to the hurt of the small, individual investor? Will it allow the larger stock holding institutions to start controlling the market? Would that be better or worse than the current system where broker specialists control the market more? Will the removal of old limits on trading result in larger, quicker, maybe economically dangerous swings in the market place?

One thing seems sure, one more old way (time honored?) of doing things is beginning to fade away and within our lifetime if not sooner probably will be gone.

Whether this will be a good thing or not remains to be seen.

The older NYSE system has survived SEC regulations, the competing NASDAQ, computerized markets the world over, and may manage to survive this too, and for one very strong reason. It has that personal touch of human interaction, face to face.


The New York Stock Exchange on Monday said it plans to scrap limits on electronic trading and expand computer-driven orders in a historic move seen as eroding the two-century dominance of its open-outcry auction system.

The plan follows intense pressure on the exchange from big institutional investors and investment banks to create a more efficient and faster trading system.

.... Institutional investors have long demanded faster transactions.....

.... The NYSE's specialist system is one of the last bastions of the manual auction place in the world of stock trading,....

....The specialists are floor traders who are assigned individual stocks that they are obligated to buy and sell to preserve an orderly market. Shares in listed specialist firms fell on Monday, since the increase in electronic trading could hurt their business.

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