he New York Stock Exchange (NYSE) is exploring the possibility of introducing round-the-clock trading, similar to the continuous trading model seen in cryptocurrency markets.
To gauge trader interest, NYSE’s data analytics team has circulated a survey to market participants, inquiring about their willingness to support trading either 24/7 or throughout weekdays, and soliciting suggestions on implementing safeguards against overnight price fluctuations.
Currently, NYSE, along with Nasdaq and the Chicago Board Options Exchange, operates from Monday to Friday between 9:30 am and 4:00 pm Eastern Time.
However, assets like cryptocurrencies, US Treasurys, foreign exchange, and major stock index futures are already tradable around the clock through select brokerages.
Platforms like Robinhood and Interactive Brokers provide access to US stocks 24 hours a day during the week by facilitating “dark pool” trading, enabling international retail investors to trade shares during their respective daytime hours. However, recent reports revealed that Robinhood suspended its 24-hour trading services following escalating tensions between Israel and Iran, sparking concerns among investors about the sustainability of continuous trading.
Managing liquidity in a 24/7 trading environment has proven challenging for trading platforms in the cryptocurrency industry as well. This often leads to a mismatch between the operating hours of traditional financial institutions and the demands of large crypto traders and market makers, as highlighted by cryptocurrency research firm Kaiko. Additionally, traders frequently face sleepless nights during periods of extreme market volatility.
Though the NYSE’s poll results remain undisclosed, Tom Hearden, a senior trader at Skylands Capital, conducted his own survey among his 19,300 followers, asking whether they favour the NYSE transitioning to 24/7 trading hours. The majority of the 1,459 respondents, exceeding 70%, expressed opposition to the idea.
Let’s do a (two hour) poll
Do you support the NYSE going to 24/7 trading?
— Tom Hearden (@followtheh) April 22, 2024
Concurrently, the NYSE’s survey coincides with efforts by startup 24X National Exchange, which is pursuing approval from the Securities and Exchange Commission (SEC) to establish the nation’s inaugural continuous trading platform. The SEC is anticipated to take “months” to evaluate the proposed rule change, as stakeholders deliberate pertinent matters such as cost allocation and the function of clearing houses, according to sources cited by the Financial Times.
“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 to FT.
“I’m in favour of letting the market decide. If it succeeds, we’re all better off and if it doesn’t, well, the exchange’s investors lost.”
It marks the second attempt at SEC approval after the firm withdrew a proposal in March 2023, citing operations and technical issues.