NYSE Gears for 1 Billion Shares Daily Volume

The New York Stock Exchange said Wednesday that it is upgrading its trading systems to be able to handle volume of 1 billion shares a day by the end of 1989.

The exchange, which currently can efficiently process the buying and selling of 200 million shares a day, initially planned to broaden its capacity to 400 million shares a day this year.

But that target was increased following the stock market crash, when volume exceeded 600 million shares on both Oct. 19 and 20. That represented 200 million shares more than the system’s current theoretical capacity.

The exchange now expects to be able to comfortably handle daily volume of 600 million shares by June, according to its operations advisory committee, which is coordinating the upgrading of the securities industry’s trading and communications systems.

“At a time when many firms are cutting costs, we believe the securities industry needs to take action to ensure the ability to handle high volume,” said NYSE President Robert Birnbaum.

Last year, daily trading volume averaged 197 million shares.

Among additional measures the NYSE has taken to upgrade its capacity since the October market crash are:

- Increasing and restructuring the Designated Order Turnaround (DOT) system’s memory for more efficient order processing.

- Program changes to the limit order systems to reduce bottlenecks during peak volume periods. A 50% capacity increase is targeted for this month.

- Adding 20 printers to the trading floor, thereby increasing capacity by 20%, and increasing the number of electronic display books on the floor by 25%.

- Replacing the automated pricing and reporting system.

Since 1982, the NYSE has spent more than $250 million upgrading its systems and technology. The exchange has budgeted another $200 million to be spent on improvements over the next five years.