Mixed emotions over deal to sell the Pacific Exchange.

The pending merger of the Pacific Exchange and Chicago Board Options Exchange will lead to the eventual closure of the Los Angeles trading floor near downtown, and that is causing emotions to run high among the 100 or so traders who work there.

On the one hand, traders are concerned about having to incur high costs to set up independent offices. But simultaneously, they are excited about the prospect of a regional equities exchange that would be free of options trading.

Expectations are that the CBOE is only interested in the PCX's fast-growing options trading division, which is based in San Francisco. That would leave the equities trading arm, the part dominant in L.A., as an independent exchange.

"The power has shifted to options over the last couple of years," said Briant Patterson, a floor trader with Seidler Cos. Inc., who has worked on the L.A. trading floor for 10 years. "We've been under their thumb. I'd like to have our own say in things."

His views were shared by Harvey Cloyd, president of Harvey Cloyd & Co, an independent brokerage with three traders on the L.A. floor.

"Even though options have done extremely well, there are often times when we (equity traders) had opposing interests," he said. "I look forward to the two going their separate ways."

Over the last five years, the trading volume for options has risen 185 percent, while equities trading volume is up only 43 percent. While Pacific Exchange options are traded exclusively in San Francisco, the exchange simultaneously operates equity trading floors in Los Angeles and San Francisco.

With its own management, an independent equity exchange might be able to pursue new lines of business, local brokers said. An independent L.A. equities exchange would also have an easier time forming allegiances with other midsize regional exchanges, with the Cincinnati Stock Exchange being the strongest candidate.

Other advantages of an independent equities exchange would be stronger ties with Asian exchanges; global, 24-hour trading; and a larger piece of the growing Internet trading business.

CBOE officials said no change in Pacific Exchange trading would occur for at least 18 months. But the eventual shutdown of the Los Angeles trading floor is inevitable with or without a merger, due to advances in technology.

Already, around 95 percent of the orders that go through the exchange are handled electronically by the floor traders.

Both brokers and exchange officials conceded that trading could be conducted with minimal interruption by brokers working out of separate offices anywhere. The trading would be handled by a central computer system, similar to the one currently used.

"With the advances in technology, brick and mortar become less important," said Pacific Exchange spokesman Morrison Shafroth.

The Pacific Exchange is planning a pilot program to determine the feasibility of off-site trading, he said.

"We've been talking about this for a year and a half; it really is the future," he said.

Others lamented the possible loss of a physical trading floor, where brokers interact, swap ideas and develop relationships.

Even Bill Lupien, chairman and CEO of OptiMark Technologies Inc., which is currently upgrading the Pacific Exchange's electronic trading capabilities, concedes that face-to-face trading has its advantages.

"Trading floors provide the benefit of collective brainpower," said Lupien. who also spent 17 years as a trader on the floor of the L.A. exchange. "Traders. even though they compete, can learn from each other."

The closure of the L.A. trading floor raises the question of what would become of the Pacific Exchange building, situated just west of the Harbor (110) Freeway on South Beaudry Avenue. The building, adjacent to one of L.A.'s most depressed neighborhoods, has eight levels of parking and just two floors of offices.

"If the exchange does close, the building is essentially a parking structure with a trading floor on top of it," said Manfred Schaub at Cushman & Wakefield Inc. "It would be hard to lease."

For that reason, some believe L.A. city officials might make an effort to keep the trading floor open.

"I'd like to see the city of L.A. get involved in this," said Patterson. "The exchange has been here for nearly 100 years. It would be sad to see it leave."