How Did Thomas Peterffy Beat a Ban on Floor Computers?

David Senra, reading a profile of Thomas Peterffy, says Peterffy beat a ban on floor computers by turning prices into colors traders could read from 30 feet away, then by placing trades through Nasdaq instead of a pit.

In 1983, 27 years before Steve Jobs unveiled the iPad, Peterffy built the first handheld trading computer. The boxes were the size of a hardcover encyclopedia, with transistors, circuit boards, and a crude touchscreen. Each morning he uploaded fresh market data and options prices. After five trades the boxes had to be updated, so clerks sprinted two blocks between the American Stock Exchange and his office. The exchange reluctantly allowed the devices. The Chicago Board Options Exchange passed a rule that analytical devices may not be used on the trading floors.

In 1985 the New York Stock Exchange options division banned the devices in the pits and allowed monitors only on the back wall, 30 feet from the action. Over a weekend he stared at a mug of colored pencils, red then green then blue, and rewrote the code so each digit flashed as a color. Traders learned the colors in a day or two. In 1987, 16 years after a 1971 dream, the machines placed trades with no human intervention. That first fully automated system in Wall Street history ran through Nasdaq, a quote-driven network with no pits or clerks, just screens and a central matching engine.