May 4, 2008 10:13 am US/Eastern
Inside The New York Stock Exchange
What's it really like to have the weight of the world on your shoulders every day? We follow a trader who's made the Big Board his calling.
by David Molko
NEW YORK (CBS) ―
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Michael Nagle/Getty Images
The New York Stock Exchange: It's the financial hub of the world, where billions of dollars hang in the balance, and split-second decisions can make all the difference.
It's a world that Westchester native Steve Grasso knows all too well.
As church bells strike 8 a.m. on Wall Street, Grasso has been up for hours, taking in the morning headlines, checking on futures, and keeping up to the minute with overseas markets. The father of two has been trading at the financial crossroads of the world – the floor of the New York Stock Exchange – for more than 15 years. It's a place many only dream of entering.
"To me this is like Yankee Stadium," says Grasso, as he walks through the security gates. "As soon as you get in there, you hear the commotion when 9:30 rings, and you're ready to go."
Grasso trades for Stuart Frankel & Company, a small brokerage firm that buys and sells for major global clients. He specializes in energy stocks. As the opening bell rings, he's checking on prices in his company's booth. Minutes later, he heads for the center of the main trading floor, as the orders flood in.
Grasso says the process of buying and selling is now quicker than ever because of hybrid electronic trading technology. "The portfolio manager will send [the] order electronically to my booth, who routes it directly to my handheld," he says, holding what appears to be a personal data organizer the size of a school history book. "My handheld will beep. All this is happening in under a second."
Order in hand, Grasso heads across the floor to a post and a specialist, the market maker who acts as the point of execution where stocks trade. "He's the traffic cop down here. There's only point of sale for the stocks he trades. It's not like the Wild West," he says. There may not be a showdown at high noon, but with each specialist working at breakneck pace, it's a high-speed game of strategy and skill, where seconds mean billions. "I already bought and sold close to 500,000 shares on either side, and it's 9:40, only 10 minutes in," Grasso says before heading to make his next trade.
The history of the New York Stock Exchange goes back more than 200 years, originating in 1792 when a group of brokers signed the "Buttonwood Agreement." Today it's the world's largest, and in order to survive, it's changing with the times.
In 2006, the NYSE took a huge step and merged with electronic trading platform archipelago. The day after, it went public, taking on the ticker symbol "NYX."
But it didn't stop there. In 2007, the NYSE merged with Euronext, in a $20 billion deal that created the first global equities exchange.
These changes have meant more business than ever: Grasso can trade six or seven stocks at the same time instead of just one or two. On the average day, more than one billion shares now change hands on the Big Board.
But those same changes have meant layoffs and early retirement. Wall Street Historian Charles Geisst estimates that one-third to one-half of the floor traders have evaporated in the past decade. "In 10 years [the New York Stock Exchange] will be a museum. Within 20 years, it will be condos," says Geisst, pointing to London and what's referred to as "Big Bang," when the London Stock Exchange went electronic in 1986, and eliminated its floor traders. Geisst says the NYSE has always been slow to change and it's only a matter of time before it heads in the same direction: "Traders will have to give up the fact that they might be on their feet 6, 7 hours a day, and be contact sitting in front of computer. That's where they'll be."
Doreen Mogavero says that day is never going to come. She has worked on the floor of the New York Stock Exchange for almost three decades, and is one of only a handful of women.
"Every client doesn't need the same thing," says Mogavero, President & CEO of Mogavero, Lee, & Company. "We have actually managed to combine the best of the electronic world…we use our technology as a tool."
Veteran brokers like Mogavero and Grasso say they wouldn't trade their jobs for the world.
It's 1:12 p.m. and Grasso has already executed 85 orders. On the average day, he can close almost 200.
But it comes with a price.
Grasso never leaves the floor, not for lunch, not even to go to the restroom. "We wind up eating our food over a laptop answering phones," he says as he munches a burger and guzzles an energy drink. He says two a day help him keep up with the frenetic pace.
Mogavero says she's tracked how much she walks on the floor: she burns up to five miles of shoe leather day. That's why the high heels stay in the closet. "I use sneakers and I will tell you, I've used every kind of shoe under the sun," she quips as she models her white cross-trainers.
It's 3:56 p.m., four minutes away from the closing bell, and Grasso is trying to close his final deal with a specialist. The minutes pass like seconds, and the bell begins ringing. "I'll buy 30,000 shares of that at 60 cents," Grasso shouts.
Once the bell rings and the gavel strikes, specialists have a few minutes to close their stocks. The Dow Jones Industrial Average settles, down almost 215 points for the day.
Grasso says he feels great. "It's actually like a rush," he says. "I'm going out with clients. I feel like I have a second wind, but I'll probably need a third wind. I won't be home until 8, 9, or 10 tonight, and then back up at 5."
A small price to pay, some would say, to be in the trading game.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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