Traders Magazine has learned the identities of four of the New York Stock Exchange floor brokerages that have committed to partnering with the exchange in its renovation of broker booths.
MND Partners, Mogavero & Lee, Meridian Equity Partners, and Cuttone & Co. are four of at least five firms that have agreed to move into the new trading pods the exchange plans to build once they are completed in 2011. All four are independent floor brokers. Cuttone and Meridian operate upstairs trading desks as well.
"We need a new space to accommodate a new way of trading," Doreen Mogavero, chief executive of Mogavero & Lee, said. "We need the efficiency of the sort provided by an upstairs trading desk."
Like most floor brokers, Mogavero and her five traders stand 6.5 hours per day. The new configuration would allow them to sit in front of computer terminals just as do upstairs traders. Communication among staff would improve, Mogavero noted, and the firm would be able to better manage its technology.
The NYSE is pitching its rebuild (first reported by Traders Magazine on July 20) as a way for firms to blend the advantages of an NYSE floor presence with those of an upstairs trading desk. Firms would save money on real estate costs as well, the exchange maintains.
Neil Catania, chief executive of MND Partners, is a believer. The trader has been on the floor for 27 years and is looking to expand his 12-person operation to 40 traders over the next year or so. He has considered opening an upstairs desk, but has decided to work with the exchange on the pod project.
"We have looked at real estate recently, but this is the best alternative, Catania said. "Being at the point-of-sale really works for us." Due to increased demands for speed from customers and the related data latency issues, Catania believes being altogether in one space is most effective.
Both MND Partners and Mogavero & Lee are "blue line qualified" which means they are permitted to trade all stocks on all markets from the NYSE floor. Executives from both firms note that it is therefore not necessary to maintain two separate trading rooms in order to service their customers.
The exchange plans to renovate its Main Room (15,000 square feet) starting this fall. After that project is completed, it will renovate its second NYSE-listed equities trading floor, the Garage (7,500 square feet). The project will involve tearing down several very old booths, which provide space for about 400 traders and support personnel.
Once completed the new trading pods will look similar, albeit smaller, than typical upstairs desks. Monitors may be turned vertically to compensate for space limitations. The exchange expects to build about 15 pods in the Main Room. They will be occupied by the larger firms. Pods will range in size from 10 seats to 40 seats. The brokerages that are operated as sole proprietors will move to the Garage.
The project does not involve changes to the "superbooths" operated by the large full-service firms such as Goldman Sachs and JP Morgan. The new booths however will likely rival those more spacious and comfortable accommodations.