With this week's NYSE merger with electronic market operator Archipelago, the New York Stock Exchange has instantly become the world's top publicly listed stock exchange - and made a decisive plunge into electronic trading.
They used a reverse-IPO listing process - Archipelago, whose stockholders now own 30 per cent of the combined $10 billion entity, was already a public company.
Although 99 per cent of Big Board orders reach the NYSE electronically, only about 14 per cent are settled electronically. The remaining 86 per cent are executed using a technologically-updated, but still very recognizable version of the face-to-face trading floor that, in one form or another, has been used by the NYSE throughout its 213-year history.
I know how archaic it is - as a rookie broker for Merrill Lynch, they let us on the NYSE Trading Floor one day right after the close during broker training school. There's paper everywhere, people yelling and bumping into each other, and you literally have the potential for big-time errors to occur.
Specialists still manually match up buyers and sellers, and must still use their own funds to provide liquidity to particular stocks at different points during the day.
The Nasdaq now trades as many shares each day as the NYSE - even though the $20 trillion market value of the firms on the latter is five times the value of firms on the Nasdaq. This is mostly because electronic posting and settlement is cheaper, faster and less error-prone. All you have to think about is the fact that you can place a NASDAQ GTC limit order with Ameritrade (or any other other electronic broker) and get automatically notified by email, even if its on a $1.00 stock.
And it's all done electronically, virtually flawless, never touched by human hands. All done by software written by developers like you and me.
The notional value of stock in the new NYSE Group has tripled this year, and may well perform less spectacularly in the near term. Some analysts are even predicting a solid decline, as old-school members take advantage of access to the liquidity of public markets and the recent run-up in the industry's fortunes, and sell.
There's one definite winner in this: the software vendors who specialize in the electronic trading and settlement software that the new giant will undoubtedly need to implenent if it expects to compete.