New York Stock Exchange following the crypto lead - Towards 24/7 trading?

The New York Stock Exchange (NYSE) is currently exploring the possibility of transitioning to 24/7 trading, a potentially revolutionary move, largely influenced by the success of the continuously operating crypto markets.

The NYSE Gauges Ground for a Trading Hours Revolution

According to the Financial Times, the Intercontinental Exchange, owner of the NYSE, has tasked its data analysis team to survey its members on the interest of switching to 24/7 trading. This idea has gained popularity in recent years, influenced by the continuous operation of the crypto markets.

Currently, the NYSE operates from Monday to Friday from 9:30 AM to 4 PM (Eastern Time), with limited pre-market and after-hours sessions. The survey asks participants about their willingness to trade over the weekend and at night. Some brokers note a demand but highlight challenges in terms of staffing and liquidity.

Meanwhile, the startup 24 Exchange, backed by Steve Cohen, is seeking SEC approval to launch the first 24/7 stock exchange. The regulator has several months to review this unprecedented proposal.

Complex Questions to Address Before Making the Leap

Transitioning to a 24/7 model raises numerous operational, regulatory, and technical issues. Clearing houses, which guarantee the settlement of transactions, also operate on fixed schedules. The committee overseeing the “consolidated tape”, which officially records trading prices, has initiated discussions on the implications of such a change.

Moreover, the relatively low liquidity outside of traditional market hours and settlement risks still dampen institutional investors’ interest. Current night-time trading offerings, provided by some brokers, are restricted to limited price orders intended for retail investors.

In summary, the advent of a stock market operating 24/7, akin to cryptos, still seems distant, but is on the horizon. Despite the numerous challenges (regulation, liquidity, human resources), the growing interest from investors could accelerate this minor revolution. This is a matter to be closely followed in the coming months.