Image source: New York Stock Exchange
By John McCrank
NEW YORK (Reuters) – The New York Stock Exchange does not currently plan to close its trading floor and the markets are functioning as expected, even as concerns over the coronavirus cause sharp spikes in volatility, NYSE President Stacey Cunningham said on Thursday.
“If there is an outbreak, we can clean the floor pretty quickly and reopen as well,” she told CNBC in an interview. “We are not planning to close the floor at this time,” she said of the NYSE, which is owned by Intercontinental Exchange Inc.
On Wednesday, the exchange operator outlined measures to reduce the chance that the virus will affect the trading floor, according to an internal memo. Steps included mandating separate entrances and eating spaces for floor traders and NYSE and ICE employees that work in the office tower at 11 Wall Street.
Futures exchange operator CME Group said late on Wednesday it was closing its trading floor until further notice as a precaution and that all trading would be done electronically.
Concerns over how the fast-spreading coronavirus will affect the economy have pummeled markets, with volumes and volatility spiking to levels not seen since the 2007-2009 financial crisis.
Stock trading was temporarily halted market-wide shortly after the open on both Monday and Thursday as “circuit breakers” kicked in due to steep declines in share prices.
While most exchanges are fully electronic, the NYSE uses a hybrid model, with traders known as designated market makers deciding when to open stocks electronically, or through a more manual process if needed to dampen sharp price moves.
The exchange is prepared to run fully electronically if needed and stocks can be opened remotely, but right now the hybrid model is benefiting the market, Cunningham said.
“There are more stocks that we actually want to apply that human judgment to because they open with less volatility and investors get better prices,” Cunningham said of the current trading environment.
Reporting by John McCrank in New York and Shubham Kalia in Bangalore; Editing by Chizu Nomiyama and David Gregorio.