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NYSE scam prompts a question

Fifteen specialists for the New York Stock Exchange were indicted yesterday for "interpositioning" and "trading ahead," pocketing millions of dollars at the expense of legitimate traders.

Now I have a simple question. In this modern age of computerized everything, why does the NYSE still rely on human beings to match orders? Is there something I'm missing here? Perhaps some hard-core traders can write in and tell me what advantage, if any, this might have over something like the NASDAQ, but my gut tells me that any "advantage" would be to people trying to game the system.


A very good question. The Tokyo Stock Exchange went to a computerized system five years ago. This was only a couple of years after they built a new facility with a huge trading floor, so now when you visit it's more like a museum than the madhouse you see at NYSE.

Here's a paper that compares aspects of both stock exchanges:


IPE just switched to electronic-only trading a few weeks also.

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