Oh yeah, the New York Stock Exchange, while the epicenter of the trading universe, looks a bit more like an amusement park or a playground, doesn’t it? Close your eyes and you can imagine it, the hustle and bustle, the merchants screaming on the floor, the grown men sweating through their suits and buttoned shirts gesticulating like a wild group of boys playing football in an open field.

But why, in this modern day, do traders and brokers still act like an angry mob? Don’t we use computers for most trades these days anyway? Isn’t this the information age, an age dominated by instant and sterile communication? How did this madness start? Why is it still going on? This article will examine and explain the reasons why Wall Street and many other commercial moats are more like a riot after a football game than a gathering of big companies trying to amass a fortune for themselves and their clients.

First of all, there are a number of trading exchanges and trading pits, from the bond wells in Chicago to the Nikkei in far away Japan, but the world’s most famous trading exchange undoubtedly exists at the intersection of Wall Street. and Broad Street in Manhattan. The New York Stock Exchange (NYSE) had been around since 1792 when 24 New York brokers and entrepreneurs signed the famous Buttonwood deal. Most people think of the Dow-Jones Exchange when they think of the stock market. It consists of thirty of the largest companies in the United States, from GE and McDonald’s to Walmart.

The principle is simple; People use stock brokers to buy shares or percentage of ownership of a company (and its profits or losses) in exchange for cash. Money has always flown through the room at a fast and furious pace, as has action, hence the total fuss. Essentially, these shares are “auctioned” to the highest bidder who accepts a buy price, so each broker tries to get their offer accepted before the price of a share rises. This is where the screams originated, with brokers trying to yell their price and acceptance as loud as possible in an attempt to drown out and beat competing brokers to the purchase price they want. Getting a split-second offer early at pennies a share can mean the difference between millions of dollars of profit on a large stock purchase, so the immediacy and force used can be understandable when so much is at stake.

Originally, the tenor of the room was more chivalrous, as respected businessmen and brokers traded stocks at a reasonable rate and wealth simply moved between wealthy people, family to family. A Rockefeller could buy a share of Ford or Vanderbilt interests, knowing that these wealthy and successful men would generate more wealth.

Yet as America grew and the American Dream was born, ordinary people wanted to get in on the action. After the Industrial Revolution took place in America in the late 1800s, a middle class emerged as factory workers fought for a larger share of the company pie and ultimately got better wages and working conditions. The idea that any American could get rich and get rich quick took hold, and what better way than through the New York Stock Exchange.

By the 1920s, many Americans were investing in the stock market. The New York Stock Exchange was booming. Instant millionaires were popping up everywhere. There was a whole new level of wealthy Americans with teletype machines in their living rooms that gave them instant updates on market prices. That’s when the yelling and gesturing started in earnest, as brokers were overwhelmed by buyers, new customers, and purchase orders. They screamed and screamed and waved their arms to receive his orders first. The country’s position was positive. The era was known as the Roaring Twenties, and its theme song was Blue Skies because everything was turning rosy for most Americans. Consumer credit was born to help sell products that were produced in excess thanks to massive investments in stocks. The only problem was that this whole explosion of wealth was built on a house of cards almost like a Ponzi scheme. Stocks in startups were being sold that weren’t making a profit, they were just filling their coffers with investment cash, and too many people were fully leveraged in the stock market. For 9 years, from 1920 to 1929, stock prices rose with no end in sight.

That is until October 24, 1929, better known as Black Thursday. That was the day of the Great Stock Market Crash that ushered in the Great Depression, the greatest economic catastrophe the United States has ever faced. Wells erupted with noise as brokers yelled “sell, sell, sell,” trying to cut losses before it was too late, but there were no buyers. Investors fled in droves, most of them bankrupt, broke, and penniless.

Nonetheless, the New York Stock Exchange persevered and, like any stock market or market, has had its turbulent ups and downs ever since. There have been a number of peaks and valleys on the New York Stock Exchange over the years. The most recent collapse occurred in 2008 after the housing bubble burst. The market is still recovering. Numerous regulations have been put in place to make trade fairer and more acceptable. Daily merchant operations from your home computer indicate purchases and sales in an instant. In fact, most transactions are done through computers these days.

So why do grown men in suits keep yelling and gesticulating like a five-year-old having a tantrum? That’s the one thing that never seems to change.

Because at its core, the New York Stock Exchange is still an auction house system, and all DOW transactions ultimately occur on that famous floor. Even if you make a purchase on E * Trade, the trade is accepted and consumed on the New York Stock Exchange, facilitated by a broker. The yelling is not as necessary or as frequent as in the past, thanks to computers and technological advances in communication systems, but there are still runners on the floor who have to beat the competition with their fists. In fact, hand signals are more important to stock traders now, so they can quickly signal the floor specialists placing the actual buy or sell order. That explains all the crazy gesticulations ..

“Orders enter through brokerage firms that are members of the exchange and flow to floor brokers that go to a specific location on the floor where the shares are traded. At this location, known as the trading post, there are a specific person known as the specialist whose job it is to match buyers and sellers. “

By using obvious and wild gestures and yelling when necessary, so that the order can be heard, brokers communicate with their own partners these days, not so much with the auctioneer. The noise and fury grow so loud as the massive old chaos rears its ugly head and to a stranger it seems as if a rugby scrum has broken out. In fact, it simply means that a lot of operations are taking place before your eyes and to the detriment of your ears.

There will probably come a day when all is quiet on the New York Stock Exchange, but it certainly wouldn’t be as entertaining. However, in all likelihood, there will always be human operators on the floor making sure your transaction goes through, and that will always mean yelling and hand signals. So you know, the next time you see a frenzied video clip of the New York Stock Exchange, brokers aren’t practicing to become professional or political fighters. They are not learning how to guide an airplane down the runway or imitate their favorite NFL head coach on the sidelines of a close soccer game. They are just trying to make money or save money for their clients. If you happen to be one of those clients and your money is at stake, even if you only have a 401K or retirement fund, you might think these transactions are worth it.