Pacific Exchange
Encyclopedia
The Pacific Exchange was, until 2001, a regional stock exchange
with a main exchange floor and building in San Francisco, California
, USA and a branch in Los Angeles
, California
, USA. Its history began with the founding of the San Francisco Stock and Bond Exchange in 1882 and the Los Angeles Oil Exchange in 1889. In 1957, the two exchanges merged to create the Pacific Coast Stock Exchange, though trading floors were maintained in both cities. In 1973, The Exchange was renamed as the Pacific Stock Exchange and it began trading option
s three years later in 1976.
In 1999, the exchange became the first U.S. stock exchange to demutualize. The trading floor in Los Angeles was closed in 2001, followed by the floor in San Francisco a year later. 2003 saw the exchange launch PCX Plus, an electronic options trading platform. By 2005, the Pacific Exchange was bought by the owner of the ArcaEx platform, Archipelago Holdings, which then merged with the New York Stock Exchange
in 2006. The New York Stock Exchange conducts no business operations under the name Pacific Exchange, essentially ending its separate identity. Pacific Exchange equities and options trading now takes place exclusively through the NYSE Arca
(formerly known as ArcaEx) platform, an Electronic communication network (ECN)
, as NYSE Arca Equities and NYSE Arca Options, respectively.
The former equities trading building on the corner of Sansome and Pine Streets in the Financial District
of San Francisco was sold to private developers and converted by Equinox Fitness
into a fitness center. However, the options trading floor still operates in the 120 year old Mills Building that is connected to it. This trading floor had a massive expansion in September 1984. It was again expanded in the mid-nineties beginning with a larger entrance on Montgomery Street which utilized existing spiral marble staircases. The west wall was then knocked out and the corridor behind turned into additional trading areas. The overhead monitors were stacked four rows high, twice as high as the existing trading pits, in order to maximize the use of the narrow area, although these were removed later as a result of seismic concerns and replaced with counter top flat screens. Next, an unused area behind the trade-match room was converted into six additional trading areas to accommodate the exponential growth being experienced in late nineties. Unfortunately, the dual listing of issues in August 1999, decimalization of options quotes, and technological replacement of open out-cry trading took away market share from the equity options trading floor. In spite of all of this, the options floor still is functioning today with local firms such as Casey Securities and Student Options, and nationally known firms like Goldman Sachs, maintaining a presence. Other participants maintain offices and trading facilities off the exchange floor, but still remotely partake in electronic exchange trading.
Similarly, the building and real estate directly related to the Pacific Stock Exchange in Los Angeles were slated for redevelopment into high rise condos and retail stores in early to mid 2000 but nothing ever materialized, other than a couple of temporary nightclubs operating on the old Equities trading floor.
The options floor can be seen as it was in the mid-eighties in the 1986 film Quicksilver
. Actor Kevin Bacon
was the main protagonist, a market maker who 'blew out' his trading account and became a bicycle messenger
while he redeemed himself. While artistic license was used, such as being allowed to trade without a 'hard badge' or an exchange member badge, the film captured the excitement and histrionics of open outcry
trading. The film featured many actual options traders who made cameos as his counterparts. Some of them are still on the floor while others have moved on to philanthropic endeavors or to other areas of the business such as hedge funds.
Regional stock exchange
A regional stock exchange is a term used in the United States to describe stock exchanges that operates outside of the country's main financial center in New York City...
with a main exchange floor and building in San Francisco, California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
, USA and a branch in Los Angeles
Los Ángeles
Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...
, California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
, USA. Its history began with the founding of the San Francisco Stock and Bond Exchange in 1882 and the Los Angeles Oil Exchange in 1889. In 1957, the two exchanges merged to create the Pacific Coast Stock Exchange, though trading floors were maintained in both cities. In 1973, The Exchange was renamed as the Pacific Stock Exchange and it began trading option
Option (finance)
In finance, an option is a derivative financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price. The buyer of the option gains the right, but not the obligation, to engage in that transaction, while the seller incurs the...
s three years later in 1976.
In 1999, the exchange became the first U.S. stock exchange to demutualize. The trading floor in Los Angeles was closed in 2001, followed by the floor in San Francisco a year later. 2003 saw the exchange launch PCX Plus, an electronic options trading platform. By 2005, the Pacific Exchange was bought by the owner of the ArcaEx platform, Archipelago Holdings, which then merged with the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
in 2006. The New York Stock Exchange conducts no business operations under the name Pacific Exchange, essentially ending its separate identity. Pacific Exchange equities and options trading now takes place exclusively through the NYSE Arca
NYSE Arca
NYSE Arca, previously known as ArcaEx, an abbreviation of Archipelago Exchange, is a securities exchange on which both stocks and options are traded...
(formerly known as ArcaEx) platform, an Electronic communication network (ECN)
Electronic communication network
An electronic communication network is the term used in financial circles for a type of computer system that facilitates trading of financial products outside of stock exchanges. The primary products that are traded on ECNs are stocks and currencies. The first ECN, Instinet, was created in 1969...
, as NYSE Arca Equities and NYSE Arca Options, respectively.
Financial District, San Francisco, California
The Financial District is a neighborhood in San Francisco, California, that serves as its main central business district. The nickname "FiDi" is occasionally employed, analogous to nearby SoMa.-Location:...
of San Francisco was sold to private developers and converted by Equinox Fitness
Equinox Fitness
Equinox Fitness is a luxury fitness company with its national headquarters in New York. Equinox operates three separate fitness brands: Equinox Fitness, PURE Yoga and Blink Fitness. Equinox is a subsidiary of The Related Companies, one of the largest real estate development and property management...
into a fitness center. However, the options trading floor still operates in the 120 year old Mills Building that is connected to it. This trading floor had a massive expansion in September 1984. It was again expanded in the mid-nineties beginning with a larger entrance on Montgomery Street which utilized existing spiral marble staircases. The west wall was then knocked out and the corridor behind turned into additional trading areas. The overhead monitors were stacked four rows high, twice as high as the existing trading pits, in order to maximize the use of the narrow area, although these were removed later as a result of seismic concerns and replaced with counter top flat screens. Next, an unused area behind the trade-match room was converted into six additional trading areas to accommodate the exponential growth being experienced in late nineties. Unfortunately, the dual listing of issues in August 1999, decimalization of options quotes, and technological replacement of open out-cry trading took away market share from the equity options trading floor. In spite of all of this, the options floor still is functioning today with local firms such as Casey Securities and Student Options, and nationally known firms like Goldman Sachs, maintaining a presence. Other participants maintain offices and trading facilities off the exchange floor, but still remotely partake in electronic exchange trading.
Similarly, the building and real estate directly related to the Pacific Stock Exchange in Los Angeles were slated for redevelopment into high rise condos and retail stores in early to mid 2000 but nothing ever materialized, other than a couple of temporary nightclubs operating on the old Equities trading floor.
The options floor can be seen as it was in the mid-eighties in the 1986 film Quicksilver
Quicksilver (film)
Quicksilver is a 1986 feature film starring Kevin Bacon. Written and directed by Thomas Michael Donnelly, the film also includes Jami Gertz, Paul Rodriguez, Louie Anderson, Laurence Fishburne, and Rudy Ramos.-Plot:...
. Actor Kevin Bacon
Kevin Bacon
Kevin Norwood Bacon is an American film and theater actor whose notable roles include Animal House, Diner, Footloose, Flatliners, Wild Things, A Few Good Men, JFK, Apollo 13, Mystic River, The Woodsman, Trapped, Friday the 13th, Hollow Man, Tremors, Death Sentence, Frost/Nixon, Crazy, Stupid, Love....
was the main protagonist, a market maker who 'blew out' his trading account and became a bicycle messenger
Bicycle messenger
Bicycle messengers are people who work for courier companies carrying and delivering items by bicycle. Bicycle messengers are most often found in the central business districts of metropolitan areas...
while he redeemed himself. While artistic license was used, such as being allowed to trade without a 'hard badge' or an exchange member badge, the film captured the excitement and histrionics of open outcry
Open outcry
Open outcry is the name of a method of communication between professionals on a stock exchange or futures exchange. It involves shouting and the use of hand signals to transfer information primarily about buy and sell orders...
trading. The film featured many actual options traders who made cameos as his counterparts. Some of them are still on the floor while others have moved on to philanthropic endeavors or to other areas of the business such as hedge funds.