Traditional stock market players have been intrigued by the rise of crypto trading, which operates 24 hours a day. Investors wonder if stocks should follow the trend as digital currencies continue gaining popularity.
The Pandemic lockdowns triggered a surge in retail investor participation. Now you can access US stocks 24 hours a day via platforms like Robinhood and Interactive Brokers. There is clearly a demand for longer trading times.
Stock exchanges lag behind other major markets, such as US treasuries and major currencies, which operate around the clock. The global nature of financial markets would be compatible with a 24/7 NYSE.
A high level of regulatory supervision is required to establish an overnight exchange. In order to ensure stability, security, and compliance with the rules, exchanges are directly regulated by the SEC.
Trades on exchanges contribute to the consolidated “tape”, the official record of trading prices. Night-time activities could set the tone for regular trading hours.
Concerns about liquidity and settlement risk have led to a low interest in overnight trading by institutions. Currently, retail traders are using "limit orders" that expire if they are not met.
The NYSE’s survey seeks input on:
● Weekend trading feasibility.
● Investor protection during extended hours.
● Staffing considerations.
● Balancing overnight and regular market hour focus.
24 Exchange, backed by Steve Cohen’s Point72 Ventures fund, aims to launch the first round-the-clock exchange. The SEC will scrutinize their plans.
James Angel, finance professor at Georgetown University, supports letting the market decide.
“I have no idea how much volume they’re going to be doing in the middle of the night. But it’s really not up to the SEC to decide whether it’s commercially viable or not,” said James Angel, a finance professor at Georgetown University, who filed a letter supporting 24X’s plan.
“I’m in favor of letting the market decide. If it succeeds, we’re all better off and if it doesn’t, well, the exchange’s investors lost.”
The committee overseeing the consolidated tape examines cost implications.
The outcome remains uncertain. If successful, a 24/7 NYSE could revolutionize trading dynamics. However, challenges persist, and the market will ultimately determine its fate.
As the clock ticks, investors watch eagerly, wondering if the NYSE will embrace the non-stop rhythm of global finance.
