[ I N D E P T H | 2 4 H O U R E Q U I T I E S T R A D I N G ]
al platforms, including OTC Markets and Blue Ocean Technologies, have offered out of hours trading for some time now, but recent moves by major exchanges suggest the topic is set to become increasingly mainstream.
In October 2024, the New York Stock Exchange( NYSE) proposed plans to extend weekday US equities trading on its NYSE Arca platform to 22 hours a day, subject to regulatory approvals. Meanwhile, 24X National Exchange received approval from the US Securities and Exchange Commission( SEC) for near-continuous sessions for equities trading.
“ While it’ s US-centric today in terms of liquidity and interest, it’ s an emerging trend that is likely to spread across other markets.”
MAGNUS HAGLIND, SVP AND HEAD OF MARKET INFRASTRUCTURE TECHNOLOGY AT NASDAQ
Cboe Global Markets revealed plans in February of this year to expand its trading hours for US equities, moving to a 24 / 5 model, subject to regulatory approvals. This was followed by news revealed in March that Nasdaq had begun engaging with regulators to enable 24 / 5 trading on the Nasdaq Stock Market.
The potential benefits are clear and include the ability to respond to episodic events and manage risk in real-time. The extension also offers US traders a greater overlap with other regions in different time zones.
“ Demand for 24-hour trading is largely focused on US markets, with increasing demand from other regions to trade US equities and gain exposure to specific indices or to specific stocks,” states Magnus Haglind, senior vice president and head of market infrastructure technology at Nasdaq.
“ While it’ s US-centric today in terms of liquidity and interest, it’ s an emerging trend that is likely to spread across other markets.”
Retail-led innovation Whether the push in the US is fuelled by institutions is another question all together. Depending on where an individual sits in the trading value chain, their priorities tend to differ.
For the retail segment, the move could mean access to markets in times that are more suitable to an individual trader. However, for institutional investors – who often seek to reduce market toxicity and fragmentation – there is, a preference for shorter trading sessions.
“ It gives the retail market the opportunity to react to overnight news, geopolitical headlines, perhaps announcements that come out after the core US markets are closed. It probably provides greater opportunity for the retail sector,” suggests Ed Wicks, global head of trading and liquidity management, Asset Management, Legal & General.
Amid opposing responses to expanded trading hours, there seems to be a consensus that equities shouldn’ t necessarily exactly mirror crypto markets, exampled by the 24 / 5 model opted for by US venues.
“ We might be on the way, but 24 / 7 specifically is quite a way out. When you start talking about weekends and holidays, that adds many layers of complexity,” suggests Kevin Tyrrell, head of markets at NYSE.
Retail trading has been central to much of the push in the US to extend the trading day. Crypto was a game changer for many retail participants, particularly due to the ability to trade at hours that suit an individual trader. However, while the US boasts a large and growing retail market, this is something that the UK and much of mainland Europe lack.
“ We might be on the way, but 24 / 7 specifically is quite a way out.”
KEVIN TYRRELL, HEAD OF MARKETS AT NYSE
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