The winds of change are blowing through Wall Street, potentially turning the traditional trading hours on their head. The New York Stock Exchange is seriously thinking about letting stocks trade hands around the clock, every day of the week, drawing inspiration from the never-sleeping cryptocurrency markets.
This bombshell was dropped by the Financial Times and has since ignited a fiery debate across different financial circles, including Crypto Twitter. According to FT’s report, what is causing this revolutionary shift is the problem of “liquidity” — a term that refers to how easy it is to buy or sell stocks without affecting their price.
Right now, some brokerage firms offer all-hours trading, but it’s not all that it’s cracked up to be because there aren’t enough people trading. The NYSE’s big idea is to step in and fix this by directly offering 24/7 trading, making it easier for everyone to trade whenever they want. Yet, the real problem is whether investors are truly itching for a market that never hits the off switch.
As it stands, FT says the NYSE’s tradition spans centuries with daily trading marked by the ringing of the opening and closing bells. However, the truth is, trading has long transcended these set hours thanks to digital platforms. Now, with the proposal of a 24/7 market, the idea is not just a nod to tradition but a leap into the future, fueled by a partnership with 24 Exchange—a venture backed by the billionaire Steve Cohen.
Dmitri Galin, the CEO of 24 Exchange, made a compelling case, stating, “Anyone who wants to trade crypto 24/7 would also like to trade Apple or Microsoft 24/7.” This comment highlights a growing trend where the lines between different trading markets are blurring, thanks in part to the global spike in retail trading during the COVID-19 pandemic.
The pandemic, aside from being a global health crisis, also transformed financial markets, showcasing the robustness of trading infrastructures capable of operating beyond the traditional hours.
Moreover, the NYSE is not just throwing this idea out into the wild without a safety net. They’re taking a methodical approach by surveying market participants. They’re asking the tough questions:
“Should we trade non-stop, every day? How can we protect investors from wild price swings that could happen while they’re asleep? And what about the folks who have to manage these all-night trading sessions?”
Speaking of managing, current setups allow traders to place “limit” orders during off-hours, which means they can set a price they’re willing to pay for stocks, and if they don’t find takers, the deal’s off when the morning comes.
However, this isn’t enough for some.
An institutional broker threw in their two cents, pointing out that while there’s a clear demand for trading round the clock, it’s not universally desired across the market. They also flagged another potential headache. Staffing.
Trading at 2 a.m. or on a lazy Saturday afternoon isn’t the same as a bustling weekday. This could mean more than just extra coffee for traders. It’s about ensuring there’s enough support in place to handle issues that pop up at odd hours.
So, what’s next for this proposal? It’s up in the air, guys. The NYSE’s venture into 24/7 trading could revolutionize how and when we trade stocks, making the market accessible in real-time to every corner of the world.
Whether or not this will become the new norm is still under discussion, but one thing’s for sure. Trading is possibly on the brink of a major overhaul. Will this be a boon for the insomniac trader or just a flash in the pan? I guess time will tell.
