The New York Stock Exchange is polling market participants on the merits of 24/7 stock trading.
The NYSE survey is part of the Intercontinental Exchange, which is conducted by its data analytics team and not management, but it highlights growing interest in trading the likes of Nvidia or Apple overnight from August 8. pm to 4 am.
The issue has become a hot topic in recent years, fueled in part by 24/7 cryptocurrency trading activity and an increase in retail investor activity, fueled by the ban. lockdown due to the coronavirus pandemic.
Stock exchanges have become something of a laggard in a world where other major markets, including U.S. Treasuries, major currencies and leading stock index Futures Contract , have can be traded around the clock from Monday to Friday.
Some retail brokers, including Robinhood and Interactive Brokers, now offer 24-hour week access to US stocks with trades matched to their in-house stocks or executed through the venue “dark pool” trading like Blue Ocean, where US stocks at night are traded with Asian retail investors during the day.
However, an overnight exchange would be a step change in terms of trading levels due to regulatory scrutiny of dark pools. Exchanges will be directly monitored and tested for stability and security by the Securities and Exchange Commission and will need approval to change any rules.
The NYSE survey asked respondents whether they thought 24/7 trading should take place on weekends as well as during the five weekdays and how investors should be protected from price fluctuations. and how respondents would staff any overnight sessions.
The survey comes as startup 24 Exchange, backed by Steve Cohen's Point72 Ventures, is seeking SEC approval to launch its first 24/7 exchange. The filing is the second attempt by 24X, which withdrew its proposal last year over technical and operational issues.
As of Friday, no letters raised issues with 24X's latest proposal. The SEC has several months to thoroughly XEM the plan.
“I don't know what they will do with the volume at midnight. But really the SEC doesn't have the power to decide whether it's commercially viable or not.”
James Angel, professor of finance at Georgetown University
Institutional interest in overnight trading has been limited due to concerns about relatively liquidation and settlement risk, among other issues.
Current night trading services only allow retail traders to place “limit” orders in which they state the price at which they will buy or sell. If that order is not fulfilled, the order will expire and will not be filled the next morning.
“There is demand for 24-hour trading, but not necessarily from the entire market,” said one institutional broker, warning that basic night staffing could be an issue. other worrying.
VIC Crypto compiled
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