The current COVID-19 pandemic has forced many of us to work from home and to practice "social distancing". As such, it's not surprising that many trading floors have closed over the past days including LME, CME, CBOE and, only yesterday, NYSE.

The Rise of the Machines

Over the past 20 years, trading has increasingly moved away from the floor (and also away from phones) and onto to computer screens. e-Trading now dominates Equities, FX and futures, and Fixed Income is rapidly moving towards this model, as better, faster, cheaper and more robust technology increases access to these markets.

For many, e-Trading is simply a more efficient and faster way to trade during normal market conditions.

Although the current market can hardly be called normal, it is COVID-19 that is forcing trading floors to close, and e-trading is coping quite well in these volatile markets. Combined with voice trading for the more difficult trades (large size, non-standard, illiquid assets….), the financial markets continue to function.

So the big question is: Will the Trading Floors Ever Reopen?

CBOE said in a statement that, closing its trading floor was "…not a test for permanent closure…" But some exchanges may see this as an opportunity to review the impact of embracing e-trading completely If their electronic markets function properly, they may want to use e-trading to capture a larger geographical group of traders and cut the significant cost of maintaining a physical trading floor.

…our markets are fully capable of operating in an all-electronic fashion to serve all participants, and we will proceed in that manner until we can re-open our trading floors to our members,"said Stacey Cunningham, President of the New York Stock Exchange. "All NYSE markets will continue to operate under normal trading hours despite the closure of the trading floors."

The key seems to be how long the floors remain closed. For many traders, if they become used to e-trading, and it becomes the norm, then they will likely continue to do so.

Watch this space.