Present and Future Shock

Among the nightmares that might disturb the sleep of any professional stock trader is the vision of seeing himself replaced by a computer. The fear is real, even if the prospect is not immediate. Computers could easily match buyers' bids and sellers' asking prices, record deals and make entries in the accounts --at least for routine transactions. On the nation's stock exchanges, however, securities are still bought and sold in face-to-face auctions, partly because of the entrenched interests of their members and the encrusted practices of history.

Quieter Bazaar. Last week a substantial part of the computerized future arrived--not for the proud exchanges but for the humbler over-the-counter market. Until now, that market has been a telephonic bazaar for shares of firms too small to qualify for listing or unwilling to meet the exchanges' disclosure requirements. Brokers have had to find out the going price of any given over-the-counter stock by making individual calls to other brokers specializing in those shares. In a technological leap, 750 leading brokers switched last week to an automated quotation system. They punched their bid-and-asked prices into desktop terminals connected to Univac computers in Trumbull, Conn., and read the resulting information on TV-like consoles. To close a deal, a broker then phoned the firm offering the most attractive price. The arrangement not only mutes the shouting in over-the-counter trading rooms but gives a customer more assurance that his own broker is obtaining the best price at any moment.

The system goes by the cumbersome name of NASDAQ, for National Association of Security Dealers Automated Quotations. It was developed at a cost of $23 million by Bunker-Ramo Corp., and gives instant readings on 2,374 of the most actively traded stocks on the over-the-counter market. Another 200 will be added this month, and eventually as many as 20,000 of the approximately 50,000 over-the-counter stocks will be included. At present, NASDAQ lists only companies that have at least $1,000,000 in assets, 500 stockholders and a stock that sells for $3 a share or more.

There is no practical reason why NASDAQ cannot also show prices for stocks listed on the exchanges, except that exchange members are understandably opposed to the notion. Next month the board of governors of the securities dealers' association intends to consider whether--or more likely when--to include at least a sampling of listed stocks. If that idea takes hold, NASDAQ could in time shake the dominance of even the New York Stock Exchange in the securities market, because it will make off-board trading in listed securities more convenient for brokers--and perhaps cheaper for investors.

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