The New York Stock Exchange announced on Wednesday that it would be closing its trading floor as of Monday morning, and trades will be fully electronic until further notice. The announcement was made after a trader and an employee of the exchange tested positive for the COVID-19 Coronavirus.
Reassuring investors, the exchange announced that “Trading and regulatory oversight of all NYSE-listed securities will continue without interruption.” The closure will impact the trading floor of the stock exchange in New York, as well as the NYSE Arca Options trading floor in San Francisco.
Officials called it a “Precautionary step to protect the health and well-being of employees and the floor community.”
This is the first time since 2012 that the exchange closed its physical trading floor.
Although the exchange floor is often portrayed and perceived as the beating heart of the stock market, the reality is that most transactions are performed online today. Roughly 250 traders are on the floor each day, compared to thousands of brokers and traders before electronic transactions were available.
Will the Coronavirus Cause the Stock Market to Close?
Some investors fear that this latest development is a precursor to a total temporary closure of the U.S. stock markets. While transactions can be managed digitally, fear and panic in the markets have led to significant declines this month.
A total market shutdown is not unprecedented. Markets were closed following the 9/11 Terrorist Attacks, and for other notable events like the Moon landing and at times of war early last century.
President Trump does have the power to order the closure of all markets, although we are far from this becoming a reality today.
Instead, trading is likely to be halted if the markets show signs of freefall. These ‘circuit breakers’ are used to discourage panic selling that could contribute to a total market collapse. Trading halts are usually triggered when major indexes fall more than 7% from the previous close.
Is There Still Room for Engagement in This Volatile Market?
Stock market futures are down, and all major indexes declined on Wednesday.
However, stocks are still being traded. People may even find that some key growth stocks are more attractive after shedding their gains. Apple Inc. (NASDAQ: AAPL) is one notable example. The stock is down -22.99% over the last 30 days, yet its fundamental strength as a technology leader makes it a potential pick for investors looking for a bargain on the dip.
There’s plenty of room left for engagement, but investors must carefully manage their stock picks and wider portfolios. A market downturn is never good news, but increased affordability could drive trades over the long term.
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