Tickertape became de rigueur for blowout parades, like this one for General
Douglas MacArthur after President Harry
Truman fired him from commanding the
US armed forces in Korea in 1951. 31
In one form or another, the ticker is still
with us today—on the wall, or on the bottom of your TV screen. 32
On the floor of the NYSE, traders using
all the information available to them did
their trading at posts, where specialists
made a market for all buyers and sellers.
Understanding what happens at the posts is
step one in understanding our ever higher
frequency markets. The posts themselves
have changed with the market. 33 34 35
Note that the limit order book, a central
feature of electronic markets that trade in
microseconds, is seen as an actual book in
those slower, simpler days.
With the progress of technology, prodigious amounts of information can be moved
quickly. But all of this information moving
around in a hurry can get overwhelming.
Telephones moved into exchanges alongside
the ticker machines. This greatly expanded
the capacity of the market to handle external
order flow and connected the exchanges to
the public network. Some eager adopters got
carried away, as seen in the photo of a German trading room in the 1950s. 36
So far, this article has been about technologies for moving information around:
hand signals, semaphores, telegraphy,
stock tickers and telephones.
When it comes to using information,
however, we’re talking about computers.
In the 1930s, if a person said he had six
computers in his office, this is what he
meant — the six women of the NYSE computing department circa 1925. 37
the technological advance was the invention of the stock ticker in 1867 by Edward
Callahan. 25
The first models were a little too delicate
for boisterous NYSE crowds, so Thomas
Edison was hired to improve them to meet
Wall Street combat standards. 26
Edison just kept dropping the ticker
out of a second-floor window and fixing it
when it broke until it didn’t break anymore.
Finally, he ended up with this design. 27
These can still be seen in museums,
Wall Street offices and the occasional sidewalk sale. Ticker tape, like the roof, hand
signals and the telegraph, was a
27
huge success, probably the most
important technology in finance
up to that time. People even set up
jumbo magnifying lens devices to
project them onto walls.
People saved tapes and studied
them — the first high-frequency
market microstructure studies.
Here’s a fellow doing just that. 28
On the floor, there were “human
Quotrons” who used to pick up the
most recent end of tape and follow it back in time to find the latest price quotes for specific stocks.
This wasn’t that long ago. Frank Baxter,
former chairman at Jefferies and a recent
US ambassador to Uruguay, started out
doing this.
All that ticker tape also made for nice
parades. Here we see a group of specialists
celebrating the one-millionth bagging of a
buy-side trader. 29
Technological progress brought bigger, better and faster ticker machines. The
ticker tape became the public symbol for
the market. 30
25
26
28
29
30
32
54 Financial History | Spring/Summer 2011 | www.MoAF.org
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