NYSE explores 24/7 trading to keep up with crypto markets
The New York Stock Exchange (NYSE) is considering 24-hour stock trading in an effort to match the uninterrupted environment of cryptocurrency markets.
The exchange’s data analytics team is surveying market participants to seek their interest and support for transitioning to a 24/7 trading model.
The survey considers extended trading to challenge the traditional Monday-to-Friday schedule and queries the ways in which investors could be protected from erratic price swings.
It asks respondents to consider if “time spent thinking about overnight trading would be better spent on regular market hour trading” and how they would staff any overnight sessions.
The NYSE said the poll aims to address the growing global appetite for constant buy-sell opportunities, mirroring the non-stop nature of crypto trading.
Rise of digital assets
While assets such as cryptocurrencies, US Treasuries and leading stock index futures can already be traded around the clock, stock exchanges have traditionally adhered to limited trading hours.
The continuous trading model could potentially reduce the volatility seen at market openings, as news and events would immediately reflect in stock prices, leading to a more stable and predictable market environment.
Round-the-clock trading has become a hot topic in recent years with the rise of digital assets and an increase in retail investor activity during the Covid-19 lockdowns.
US brokers and trading platforms say activity in the so-called “overnight period” between the market closing and re-opening the next day has risen sharply in the past 12 months, driven by demand from smaller investors in Asia and Europe.
Robinhood service
In July, retail investors began trading around the clock from Sunday evening to Friday evening using a 24-hour market service introduced by investing platform Robinhood, though only limit orders can generally be placed at present.
“We are relentlessly focused on building products tailored to fit people’s lives and make investing more accessible to everyone – not just a select few,” the company said in a statement at the time of launch.
“We have often heard from customers that it is tough to find time for investing during regular market hours with work, family and everything in between.”
24 Exchange filing
In March, multi-asset class start-up 24 Exchange announced it would file an application to create the nation’s first fully-electronic exchange for round-the-clock trading by investors worldwide.
The filing is the second attempt for the company after it withdrew a proposal last year over operational and technical issues.
24 Exchange operates on the belief that traders are most at risk when the market is closed in their geographic location.
It aims to eliminate this problem by offering 24/7 retail trading.
If successful in its licence bid, the company said it would represent the “highest levels of regulatory scrutiny and oversight – as well as of investor protections, resilience and quality – that a global equities trading platform could achieve”.