When one is trading from the screen, generally speaking, one will not know who is on the other side of the trade. The anonymity the screen brings reduces many inputs but increases privacy. When trading in the pit, one gets to see who fills the other side of the trade. One gets to see what all the other brokers and locals are doing, their actions, and their intentions. There are many visual and auditory clues one could pick up in the pit that just aren't available from the screen. With the screen, one gets anonymity, with the pit, one gets transparency.

anonymous writes: 

I have always found former pit traders' laments about electronic trading as self-interested, sometimes intellectually dishonest, and often hopelessly romantically nostalgic. The market's purpose, I thought, was to bring together the maximum number of buyers and sellers so they could freely engage with each other and find a continuous clearing price — not to have a pit local or broker skim a penny off of every one of my orders, charge steep commissions, and front run me, all while sounding sanctimonious about providing liquidity. . Admittedly, the smartest pit traders have now reincarnated as high frequency trading savants, who now skim a 1/1000th of a penny off of each of my orders, but most evidence suggests that overall transaction costs are lower than ever before.

Similarly, one can compare Social Networks/Facebook/Twitter/Instagram to the old local social club, barber shop, church, town hall setting. As Jeff notes, one provides anonymity and the other gets transparency. But in contrast to Markets, I believe there is a bigger difference between Friends on the screen and Friends in real life. And here, just like the pit trader, I may be a dinosaur, but I prefer friends in Real Life.


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