Bye-bye outcry: 30 years since the pandemonium ended

This June marks 30 years since the JSE migrated from open outcry to electronic trading. I joined the market in 1972 and was fortunate to live in both worlds. I saw the chalkboards, order pads, the bellowing, the hand signals, the cigarette smoke and the adrenaline. And then I watched it all vanish into silence, screens and algorithms.

On the trading floor, you felt the joy of rising markets in your chest and the panic of falling ones in your stomach. It was inefficient and open to abuse – but it was human. The market had a pulse, and you felt every beat. Mornings were quiet, but when the bell rang at 9.30am the tempo surged. News broke, and the noise swelled. You did not need to check the boards; you felt it in the air.

Nothing captured the essence of open outcry more than a new listing. The floor transformed into theatre. Sasol’s 1979 debut was a national event: every institution and private client wanted a stake. Lefkochrysos (Lefko), which floated in the platinum boom of the early 1980s, was remembered less for its profitability than for its hype. Its listing was legendary, like a scene from My Big Fat Greek Wedding.

Listing day was opening night. Suits, cigarette smoke, wads of paper and high hopes. The gallery of spouses, students, journalists and employees strained to watch. A scrum formed around the podium in anticipation of the opening bell, nerves jangling. Brokers elbowed for position, orders clutched in sweaty hands, trying to catch the issuing broker’s eye. Fidgeting, deep breathing and raw anticipation.

I still remember Lefko’s opening. Half the floor could not pronounce the company name, but they shouted bids anyway. Hands waving, tickets flying, while chair Loucas Pouroulis stood grinning among family and friends as the market decided his company’s fate. Within months, the price slid as exploration results disappointed. There was no remorse. It was just part of the game.

Fertile ground for abuse

The floor was its own world. Traders huddled in clusters below chalk boards; clerks hammered the latest prices on telex machines; runners sprinted back and forth reporting deals. The language was pressure-cooked – half Afrikaans, half English, mostly unprintable. Gallows humour was trader poetry.

Electronic screens killed much of that culture. We lost the noise, the slang, the camaraderie. In return we gained transparency, liquidity and fairness. The vast majority of floor traders lived by the JSE’s motto, Dictum Meum Pactum (My Word Is My Bond), yet the inefficiencies of open outcry created fertile ground for abuse by a few opportunists. Going electronic ruined the fun, but it eliminated much of the wrongdoing.

Because transactions were not recorded in real time, dealers had room to bend the rules. A favourite ploy was the allocation trick: buy shares during the day, then wait until the close to decide where to put them. If the price had risen, the dealer would allocate the trade to his own account; if it had fallen, it would be pushed into a client’s account. Gambling with other people’s money, shielded by administrative delays.

Another abuse was front running. A dealer managing a large client order knew the price impact was inevitable. Before executing, he would quietly instruct a collaborator at another firm to buy a parcel through a joint account they controlled in the collaborator’s name. This sidestepped his own firm’s surveillance. Once the client’s order hit the floor and drove the price higher, they would sell at a guaranteed profit. Privileged knowledge turned into easy money, and in a world of collusion and imperfect audit trails, it was hard to catch.

More prospects, less passion

The JSE’s electronic system, introduced in June 1996, modernised the exchange and plugged it into the world. It was quieter and lonelier, but it brought liquidity, transparency and global connection. It paved the way for Strate, dematerialisation, dual listings and offshore allowances; it meant South African investors could buy Apple, Microsoft, LVMH and Amazon.

Today we trade offshore not to snub the JSE, but because our job is to seek better returns from a wider range of opportunities. The same revolution that replaced open outcry opened doors to New York, London and Europe. The passion moved, but our prospects exploded.

I appreciate the benefits of electronic markets, but I miss the apprenticeship – the mentorship by osmosis, the instinct you only learn standing next to an experienced dealer for a decade. The paper system was flawed, but it forced human contact. It built trust, grudges and lifelong friendships.

Now a new listing is a timestamp and a matching engine. Price appears. No roar, no scrum, no gallery gasping, no dancing the sirtaki. A 22-year-old trader in Bellville clicks “buy” and never sees the person on the other side.

The floor taught me how markets breathe, how people behave, and how friendships endure. Electronic trading made markets fairer, faster and richer, but more solitary. And I still yearn for the days when a colleague would mutter, “Fucked by the fickle finger of fate” as he walked off the floor with a submissive shrug, rueing the market’s fall.

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_{Top image collage: GraemeWilliams/South/Gallo (photograph); Rawpixel; Currency.}