SIMON BROWN: I’m chatting with David Shapiro. You’ll find him at Sasfin. David, I appreciate the time today. We are talking about exchanges and how they work. I want to go all the way back to open outcry [system]. I did a trip to Joburg in the mid-eighties, and to the open outcry [trading floor], and I’ve never seen such chaos in my life.
And when you wanted to do something, you would shout the name of the stock and you would shout an order to a recorder on the board who would put the price at which you wanted to buy or sell in chalk on a board. So it was very antiquated, very quaint, lots of fun, but very inefficient. It was a lot of fun. There was a lot of noise. You could actually feel the pulse of the market. But in hindsight it was very, very difficult to trade and very difficult to be fair on clients.
DAVID SHAPIRO: Yes. The energy was there and you felt it. You could feel the build-up. You might have seen pictures of a new listing when a new listing came. It was a scrum. It was a lot of fun. There was a lot of acting there. It was a lot of show for the public and for everybody. It was always an event. Not only that, you’d celebrate the event with going up to the broker, the sponsoring broker’s offices. A huge spread there. So it was much more of a community and understanding.
DAVID SHAPIRO: Oh, yes. No doubt about that. That’s one thing that electronic trading favours. Yes, there are openings if you have large orders and you want to bypass the market; because you might disturb the market there are a whole lot of rules around that. But generally, you can get in first and you’ve got sight of what the market is. You know where the buyers are, you know where the sellers are, because the trading system displays that for you.
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