Not since the tumultuous days of the late '20s and early '30s has the New York Stock Exchange been so busy. Since the first of the year, as institutions and smaller investors swarmed back to the market, the volume of shares traded has on 17 trading days exceeded 5,000,000 shares (v. only one 5,000,000-share day in 1960 ).
One day last week volume vaulted over the 6,000,000 mark—an event that has happened only three times before in the past 27 years.* Though the Dow-Jones industrial average ended the week at 663.56.
off 8.01, there was no sign of a letup in activity—and each share traded meant commissions for somebody.
To cope with a daily volume of trading that the Exchange had not expected until 1965, the Exchange has hired 75 new floor employees. Even so, the trading tape—the Exchange's vital link with the outside business world—has lagged behind transactions every day this year except two. making it difficult for brokers off the floor to keep track of prices or to know which stocks are most active.
Needed: Faster Tape. The current stock ticker, in operation since 1930, can record 80 to 85 sales a minute. At present, sales sometimes run as high as 150 a minute. The ticker prints the transactions horizontally on a ¾-in. tape, giving the issue symbols on the top line, the volume and price on the bottom line, as follows:
MGM ERP
3000s54½ 3s14⅞
This means that 3,000 shares of Metro-Goldwyn-Mayer were sold at $54.50 per share, and 300 shares of Emerson Radio & Phonograph (ERP) at $14.87½ (in 100-share lots the zeros are always omitted). When the tape is one minute late, the first digit is dropped from the price of the sale to speed up transmission, e.g., the M-G-M notation would read 3000s4½. When three minutes behind, the last two digits of the number of shares traded are also dropped, so that the tape would read 30s4½. When five minutes late, another sending machine is phased into the ticker to give flash reports on the prices of 30 representative stocks to indicate how the market in general is behaving.
Under present arrangements, moving the tape any faster would not be practical. In most brokerage houses, as in the Stock Exchange itself, the tape is projected onto—and moves across—a slim, horizontal screen usually 5 ft. long. Even if the ticker could print faster, viewers would have a hard time reading it.
Most Exchange experts think the solution is a whole new ticker system. A leading prospect: a high-speed telegraphic page printer that operates at 900 characters a minute. Developed by Teletype Inc., a subsidiary of Western Electric, it uses a 3½-in. roll of paper, prints a vertical column with the stock symbol, volume and price all on one line. The Exchange will test a prototype in the summer, hopes to switch to a new system as soon as possible. But the problem is formidable: Thousands of stock tickers that are geared to the old narrower tape will have to be replaced, and new screen and projection equipment for handling the new tape will have to foe developed.