The Financial Times reported yesterday that the New York Stock Exchange (NYSE), the world’s largest stock exchange, is conducting a market survey on the feasibility of 24/7 securities trading.
According to the report, the survey was proposed by the NYSE data analytics team and not initiated by the management. This reflects the increasing interest of investors in trading stocks during non-traditional trading hours, specifically from 8 p.m. to 4 a.m. Eastern Time.
The NYSE survey asks participants whether they believe round-the-clock trading should occur on weekends and weekdays from Monday to Friday, how to protect investors from price fluctuations, and how participants would arrange staffing during the early morning non-trading hours.
Following the trend of 24/7 cryptocurrency trading, traditional stock exchanges are planning to catch up. The Financial Times reports that the NYSE is currently investigating the feasibility of trading stocks round-the-clock by surveying market participants.
Currently, traditional stock exchanges are lagging behind in providing round-the-clock trading. Other major financial markets, including US Treasuries, major currencies, and major stock index futures markets, already offer round-the-clock trading from Monday to Friday. Several brokerages, including Robinhood and Interactive Brokers, also provide 24-hour US stock trading services on weekdays, typically through matching positions held within the platform or through “dark pools” such as Blue Ocean, which are usually used by Asian retail investors during daytime trading hours.
The Financial Times points out that once stock exchanges open for round-the-clock trading, there will be a significant change in the market’s perception of overnight trading. Compared to “dark pools,” overnight trading is subject to strict regulation. The NYSE is directly regulated by the US Securities and Exchange Commission (SEC), and stability and security will be tested and require approval from regulatory authorities to change the rules.
The SEC is currently reviewing the application for the first 24/7 stock exchange.
The latest survey by the NYSE is said to have been initiated after startup company 24 Exchange applied to the SEC to operate its stock trading platform 24/7. The SEC will have several months to review and decide whether to approve this first 24/7 stock exchange.
Two sources revealed that the SEC committee has begun holding meetings to study the issues involved in the transition of stock exchanges to 24-hour operations, including who should bear the costs and the need for clearinghouses to operate within specified timeframes.
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