Does Floor Trading Matter?

• 成果类型: Article
• 署名作者: Brogaard, Jonathan; Ringgenberg, Matthew C.; Roesch, Dominik
• 署名单位: Utah System of Higher Education; University of Utah; State University of New York (SUNY) System; University at Buffalo, SUNY
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.13401
• 发表日期: 2025
• 页码: 375-414
• 关键词: market; auction; cost

摘要

Although algorithmic trading now dominates financial markets, some exchanges continue to use human floor traders. On March 23, 2020 the NYSE suspended floor trading because of COVID-19. Using a difference-in-differences analysis around the closure of the floor, we find that floor traders are important contributors to market quality. The suspension of floor trading leads to higher spreads and larger pricing errors for treated stocks relative to control stocks. To explore the mechanism, we exploit two partial floor reopenings that have different characteristics. Our finding suggests that in-person human interaction facilitates the transfer of valuable information that algorithms lack.