Why the human element is critical during volatility
As financial markets evolved, most global exchanges transitioned to fully electronic models; In contrast, the NYSE has maintained its status as one of the only listings exchanges with an active trading floor. The NYSE applies a unique market model that combines electronic trading technology with human judgment through the efforts of its Designated Market Makers (DMMs). Market makers are responsible for maintaining fair and orderly markets by holding securities to facilitate trading, ensuring there is a buyer for every seller and a seller for every buyer.
As a result, there are less dramatic price movements in the trades that follow, and investors trading NYSE-listed securities are more likely to get a fair and accurate price when trading both in the open and once continuous trading begins. When facilitating the open of trading for NYSE-listed securities, DMMs consistently deliver the best price discovery with 35% less volatility on average at the open and 39% less at the close, when compared to other U.S. exchanges.*