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Closing bell
Pacific Exchange retires its venerable trading floor for stocks
Sam Zuckerman, Chronicle Economics Writer Friday, March 22, 2002
The lights went out for good on San Francisco's own little version of Wall Street yesterday.
For the last time, brokers gathered to trade stock under the vaulted ceiling and skylight of the Pacific Exchange's imposing granite edifice, a landmark in the heart of the city's Financial District.
At precisely 1:30 p.m., the exchange's closing bell sounded its final call. Traders and exchange staff members cheered, slapped each other on the back, tossed wads of order slips high in the air and hoisted beer cans, in tribute to a way of life that harks back to San Francisco's early days as a financial center.
Today, in a long-awaited move, the Pacific Exchange shifts its stock operations to the Archipelago Exchange, an all-electronic system with no trading floor. Pacific is operating it jointly with an existing computerized stock trading system named Archipelago, based in Chicago.
Pacific's floor for trading stock options, located elsewhere in the Financial District, continues to do a heavy volume of business and will stay open.
Yesterday's trading floor shutdown ends a tradition that goes back to 1882, when what was then called the San Francisco Stock and Bond Exchange opened for business. Pacific shuttered its second stock-trading floor, located in Los Angeles, last year.
The exchange's switch to all-electronic stock operations is part of a broad and wrenching transformation that is altering almost everything about the way shares are bought and sold.
Since stock exchanges emerged in the Middle Ages, orders have been routed through human brokers. But over the past few decades, an increasing portion of the business has been handled by computer.
ONLINE ONLY
Now technology has developed to the point where central places to trade shares are no longer needed, a development that has swept away the Pacific Exchange's stock trading floor and threatens even the mighty New York Stock Exchange.
"Technology is overwhelming the old way of doing business," said Junius Peake, a finance professor at the University of Northern Colorado and an expert in stock trading systems.
That has pulled the rug out from under those who earned their living buying and selling shares at the Pacific Exchange's massive trading room.
The facilities weren't plush. Traders squeezed into a few feet of counter space, hunched over computer screens and television monitors, yelling into telephones. The linoleum under their feet was scuffed, and the wooden fixtures scarred and pitted.
But the place offered a camaraderie and energy level impossible to replace. Not so long ago, before computers took over, brokers still shouted orders to each across the great hall and scrambled back and forth to make sure trades were executed properly.
"We'd be standing 6 inches away from someone in a very stressful environment," said former broker Jonathan Werts, now head of product development for the Pacific Exchange. "But we all like to hold on to our own ways."
TRADERS OUTMODED
Others had a pithier way of expressing their sense of loss.
"It's all cyber-crap," said Frank Gallagher, a broker who worked on the exchange floor for almost three decades. "There is no personality any more."
Gallagher, whose earthy manner and unmade-bed look show him to be a true trader in the blood, ruefully eyed his once jumbled possessions, now neatly boxed as he prepared to leave his work station for the last time. "I'm a dinosaur turning into oil," he said.
Many brokers say they plan to set up shop on their own. Some will use the Archipelago Exchange to trade. Others will switch to other systems.
Yesterday, only a handful of die-hard traders remained, joined at the closing bell by dozens of colleagues from years past. Over the last few years, as the trading floor's closing date approached, brokers had been abandoning the facility, an exodus that gathered momentum in recent months.
By the end, Pacific was barely trading 1 million shares a day, less than a thousandth the volume changing hands on the New York exchange. Yesterday, trading volume dribbled down to a scant 270,800.
"It used to be a beehive," said Bill Carson, an accountant who worked for Pacific Exchange floor brokers. "But lately, people were heading out the door like the building was on fire. You could shoot off a gun and not hit anyone."
Over the next few weeks, crews will clean out out the hall, taking away the brokerage sign names, the counters and great chalkboard by the balcony on which clerks once recorded stock prices. Exchange officials say only five staff members are losing jobs because of the closure.
The building, completed in 1915 to house U.S. Treasury offices and occupied by the exchange in 1930, is already on the market. Its owner Martin Brown, president of the Empire Group, said he is looking for a tenant that will keep the building intact.
"We want something consistent with the history and grandeur of the place," Brown said. The building could be occupied by a museum, a financial services company or a restaurant, he said.
E-mail Sam Zuckerman at [email protected].
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Closing bell
Pacific Exchange retires its venerable trading floor for stocks
Sam Zuckerman, Chronicle Economics Writer Friday, March 22, 2002
The lights went out for good on San Francisco's own little version of Wall Street yesterday.
For the last time, brokers gathered to trade stock under the vaulted ceiling and skylight of the Pacific Exchange's imposing granite edifice, a landmark in the heart of the city's Financial District.
At precisely 1:30 p.m., the exchange's closing bell sounded its final call. Traders and exchange staff members cheered, slapped each other on the back, tossed wads of order slips high in the air and hoisted beer cans, in tribute to a way of life that harks back to San Francisco's early days as a financial center.
Today, in a long-awaited move, the Pacific Exchange shifts its stock operations to the Archipelago Exchange, an all-electronic system with no trading floor. Pacific is operating it jointly with an existing computerized stock trading system named Archipelago, based in Chicago.
Pacific's floor for trading stock options, located elsewhere in the Financial District, continues to do a heavy volume of business and will stay open.
Yesterday's trading floor shutdown ends a tradition that goes back to 1882, when what was then called the San Francisco Stock and Bond Exchange opened for business. Pacific shuttered its second stock-trading floor, located in Los Angeles, last year.
The exchange's switch to all-electronic stock operations is part of a broad and wrenching transformation that is altering almost everything about the way shares are bought and sold.
Since stock exchanges emerged in the Middle Ages, orders have been routed through human brokers. But over the past few decades, an increasing portion of the business has been handled by computer.
ONLINE ONLY
Now technology has developed to the point where central places to trade shares are no longer needed, a development that has swept away the Pacific Exchange's stock trading floor and threatens even the mighty New York Stock Exchange.
"Technology is overwhelming the old way of doing business," said Junius Peake, a finance professor at the University of Northern Colorado and an expert in stock trading systems.
That has pulled the rug out from under those who earned their living buying and selling shares at the Pacific Exchange's massive trading room.
The facilities weren't plush. Traders squeezed into a few feet of counter space, hunched over computer screens and television monitors, yelling into telephones. The linoleum under their feet was scuffed, and the wooden fixtures scarred and pitted.
But the place offered a camaraderie and energy level impossible to replace. Not so long ago, before computers took over, brokers still shouted orders to each across the great hall and scrambled back and forth to make sure trades were executed properly.
"We'd be standing 6 inches away from someone in a very stressful environment," said former broker Jonathan Werts, now head of product development for the Pacific Exchange. "But we all like to hold on to our own ways."
TRADERS OUTMODED
Others had a pithier way of expressing their sense of loss.
"It's all cyber-crap," said Frank Gallagher, a broker who worked on the exchange floor for almost three decades. "There is no personality any more."
Gallagher, whose earthy manner and unmade-bed look show him to be a true trader in the blood, ruefully eyed his once jumbled possessions, now neatly boxed as he prepared to leave his work station for the last time. "I'm a dinosaur turning into oil," he said.
Many brokers say they plan to set up shop on their own. Some will use the Archipelago Exchange to trade. Others will switch to other systems.
Yesterday, only a handful of die-hard traders remained, joined at the closing bell by dozens of colleagues from years past. Over the last few years, as the trading floor's closing date approached, brokers had been abandoning the facility, an exodus that gathered momentum in recent months.
By the end, Pacific was barely trading 1 million shares a day, less than a thousandth the volume changing hands on the New York exchange. Yesterday, trading volume dribbled down to a scant 270,800.
"It used to be a beehive," said Bill Carson, an accountant who worked for Pacific Exchange floor brokers. "But lately, people were heading out the door like the building was on fire. You could shoot off a gun and not hit anyone."
Over the next few weeks, crews will clean out out the hall, taking away the brokerage sign names, the counters and great chalkboard by the balcony on which clerks once recorded stock prices. Exchange officials say only five staff members are losing jobs because of the closure.
The building, completed in 1915 to house U.S. Treasury offices and occupied by the exchange in 1930, is already on the market. Its owner Martin Brown, president of the Empire Group, said he is looking for a tenant that will keep the building intact.
"We want something consistent with the history and grandeur of the place," Brown said. The building could be occupied by a museum, a financial services company or a restaurant, he said.
E-mail Sam Zuckerman at [email protected].
· Printer-friendly version
· Email this article to a friend
MORE BIZ | TECH
SF Gate Business
Stock quotes, portfolio, funds and more...
SF Gate Technology
It's a high-tech world -- we just plug you into it...
David Lazarus: A case of bad timing.
Apple raises iMac prices as costs rise.
Bad news rains on VC firms.
Bay real estate market hot again.
Pacific Exchange retires its venerable trading floor for stocks.
Piper to pay for greater autonomy.
United to add two D.C. flights a day from Oakland.
3Com loses money for 8th quarter.
Chip-equipment workers face harmful chemicals, report says.
Gilead seeks FDA approval for hepatitis B treatment.
Get Quote:SymbolName
SOFTWARE
Java Architect, Database Artichect,
LOAN
Officer/ Mortgage Sales One of the 1
HOTEL
GENERAL MANAGER For mid-sized franch
SALES
OUTSIDE SALES / CONSUMER SPECIALIST
PURCHASING
City & County of San Francisco Provi
BOOKKEEPER
Electric supply co. 3 yrs exp AR/AP.
HOTEL
Holiday Inn at Fisherman's Wharf a f
EDUCATION
Principal Alternative-Sp Ed
Timothy Murphy Schl
WAREHOUSE
CLERK Temp for Int'l airline. Must b
BIOTECHNOLOGY
Sr. Drug Safety Associate
Gilead Sciences
MANAGEMENT
United Way of the Bay Area, a leader
HOTEL
St. Francis Yacht Club Asst. Club Ma
DENTAL
RDH Ocean Ave. Perio Thurs & Fridays
ACCOUNTING
Manager. WB20, KBWB, is looking for
SOCIAL WORK
Home-based parent training & counsel
Family Support Svcs
DENTAL
HYGIENIST Challenging, rewarding pos
PHYSICAL
Therapy Aide, FT/PT Orthopedic/ Spor
RESTAURANT
CHEF - Sierra Mtn Summer Resort
RETAIL
SALES Music Exchange, a growing mar-
INSURANCE
Agts & Mgrs Exp'd Exc pay, bnft, 401
ADMINISTRATIVE
United Way of the Bay Area, a leader
MEDICAL
DIRECTOR, MEDICAL WRITER
APOTHECOM ASSOC.
APT
Leasing Consultant needed for luxury
PLUMBER
WANTED $$$ Expd, truck, tools. 800-9
HEALTHCARE
RNs, RN Supervisor Program Manager
Fremont Hospital
About Top Jobs
View All Top Jobs
Feedback
©2002 San Francisco Chronicle Page B - 1
Quotes | US Market Indices | Portfolio | Mutual Funds | SF Gate Index
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