NEW YORK, Oct 22 (Reuters) - Traders may be fleeing the floor of the New York Stock Exchange as electronic trading becomes preeminent, but that didn’t stop Fox Business Network, the perky business channel that debuted last week, from setting up a studio on the floor despite the thinning market action.

Already nicknamed the “Foxhole” by some, the studio is squeezed between two floor trading booths, unlike CNBC and other rival networks that operate their studios one story above the trading floor.

FBN hopes the unique location can give it an edge over its more established rival CNBC, whose star reporter Maria Bartiromo in 1995 became the first journalist to report live daily from the NYSE floor.

But with stock market action moving almost entirely off the floor and onto computer screens, the NYSE floor is unlikely to be the battleground where the two networks fight for eyeballs, analysts said. “FBN may be able to give CNBC a run for its money, but it won’t happen on the floor of the stock exchange,” said Robert Thompson, a professor of television and popular culture at Syracuse University.

The walls of the Foxhole, an open booth measuring no more than 70 square feet, are plastered with the yellow FBN logo. Wires snake around desks holding an assortment of papers, laptops and FBN anchor Nicole Petallides’s make-up bag. A robotic camera stationed in one corner surveys the floor.

The network doesn’t plan to station anyone in the studio permanently, but will send reporters and producers to the booth depending on the news, said Brian Jones, FBN’s senior vice president of operations.

CNBC, controlled by General Electric Co GE.N, has been unrivaled in its daily coverage of the stock markets from the exchange floor, providing viewers with analysis on what is moving the market. It has about 22 people working on and off at its NYSE studio.

‘AN ANACHRONISM’

FBN’s success in placing its booth on the floor also shows how more vacant space is opening up on the floor as live traders are replaced by machines.

When Bartiromo started broadcasting from the exchange 12 years ago, the floor thronged with more than 3,300 traders. Only about half of those traders remain today.

FBN’s Brian Jones said having a studio on the floor puts the network in the thick of the market action -- even if the trading floor hustle and bustle is a shadow of its former self.

“We wanted to find a way to be where the action is as far as the traders who are still there on the floor,” Jones said.

But independent network news analyst Andrew Tyndall wondered how much of a coup FBN’s floor studio is.

“Reporting from the stock exchange nowadays is really an anachronism,” he said. “When CNBC first went there, you still had non-electronic trading, whereas now it’s much more a symbolic place than a place for news gathering.”

Not surprisingly, CNBC, which together with CNN, Bloomberg and other networks is stationed in booths upstairs, argues that Fox's positioning on the floor doesn't give News Corp's NWSa.N Rupert Murdoch's latest venture any additional advantage.

“There’s no one closer to the scene than we are,” said Jonathan Wald, CNBC’s senior vice president for business news. “We’re down there constantly, so whether or not they’ve got a studio on the floor, we’re on the floor and we have these relationships that are priceless and built over 17 years,” Wald said.

CNBC is also expanding its coverage of trading floors, although Wald said it had nothing to do with FBN’s launch. The network announced on Monday it has launched the CNBC Investor Network, which will take viewers live to trading floors across America to provide instant analysis of market moving news.

Traders on the Big Board’s floor, where many TV screens switched loyalties from CNBC to FBN last week, took a wait-and-watch approach to the network, but welcomed the new addition.

“The more channels we have, the better it is for investors, the better it is for the New York Stock Exchange,” said Doreen Mogavero, a floor trader.

“As trading is becoming more electronic, the ability for us to explain the changes to more sources is refreshing, whether CNBC or Fox,” said Jeffrey Frankel, another trader.

((Editing by Derek Caney; Reuters Messaging: anupreeta.das.reuters.com@reuters.net; +646-223-6172; e-mail: anupreeta.das@reuters.com)) Keywords: NYSE FOXBUSINESS/