The Hong Kong Stock Exchange is the first to have closed its physical auction after 31 years. Due to the changing nature of markets, Hong Kong may well be the first of many countries to follow this path. The reasoning behind the closure is, of course, the rise of e-commerce and the Internet.
According to the BBC, the Hong Kong Stock Exchange had more than a thousand traders on its climax. Now, its floor is being renovated and will be transformed into a space for conventions and exhibitions
Which market room?
Scholarships are crucial for their national, and even global, level. , economy. They allow securities brokers and traders to buy and sell stocks, bonds and other securities in a central location. However, with the rise of Internet commerce, such centralization is no longer strictly necessary. Exchanges can make more and more work online, thus avoiding a physical presence anywhere.
Even for trades that maintain a physical presence, such as the New York Stock Exchange (NYSE), their activity is more important. happens behind the scenes and out of the trading room. In fact, the corresponding NYSE engine is located in Mahwah, New Jersey, in a 400,000-square-foot facility. For a price, the NYSE sells colocation services to various high-frequency trading companies (HFTs), allowing them the fastest access to the corresponding motor of the stock market.
Beginning of a trend?
When other exchanges follow in Hong Kong's footsteps and close their physical markets? It is likely that traders will begin to tolerate greater decentralization, and barriers to entry for new trade will be reduced. No matter who has regulatory approval and the right technology would be able to open an exchange without renting the actual offices needed to accommodate a trading room.
As the digital motto continues to be more common, the attitude of its members also towards the exchanges. Cryptocurrency enthusiasts are used to dealing with a number of different small scale online exchanges and are comfortable working without the help of brokers or other centralized third parties. If digital currency really continues to grow as many fans believe, physical trading rooms could be made obsolete even faster.
As e-commerce and online commerce grow in popularity, software companies will likely improve their offerings. , allowing more and smaller exchanges to develop. Hong Kong can set a good or bad precedent according to the prospects of traders. Time will tell if other exchanges follow their example.