Revolutionizing Stock Trading: Will the NYSE Go 24/7?
As technology transforms the financial landscape, the New York Stock Exchange (NYSE) is contemplating a groundbreaking move to introduce 24/7 stock trading. This shift reflects changing investor expectations, largely influenced by the round-the-clock nature of crypto markets.
A Survey on Allowing 24/7 Stock Trading Conducted by NYSE
The NYSE has initiated a survey conducted by its data analytics team to gather perspectives from market stakeholders on the possibility of trading major stocks like Nvidia (NVDA) and Apple (AAPL) round-the-clock.
- The interest in round-the-clock trading is driven by shifts in retail investor behavior triggered by the coronavirus pandemic.
- Retail trading platforms such as Robinhood and Interactive Brokers already offer 24-hour weekday trading, either through internal matching or dark pools like Blue Ocean.
24/7 Exchange vs. Existing Setups:
An official 24/7 exchange would represent a significant advancement compared to existing setups. This exchange would operate under strict regulatory oversight by the Securities and Exchange Commission (SEC), ensuring transparency and security.
- Integration of all trades into the official “tape” would influence opening prices in regular trading sessions.
Emergence of 24 Exchange (24X):
Amidst this backdrop, 24X, initially a crypto trading platform, has pivoted to facilitating 24/7 equity trading. CEO Dmitri Galinov believes that the demand for continuous crypto trading will extend to major equities.
- Substantial investments, including funding rounds in 2021 and 2022, support this strategic shift.
Challenges of Transitioning to 24/7 Trading:
The transition to a 24/7 trading model poses several challenges, such as liquidity concerns and settlement risks. Current overnight trades are limited to “limit” orders, which expire if specific price conditions are not met by morning.
Optimism and Considerations:
Despite the complexities involved, there is cautious optimism surrounding the potential shift towards 24/7 stock trading. Aligning trading hours with global markets and the continuous operation of crypto could enhance investor engagement significantly.
Hot Take: Are 24/7 Stock Markets the Future?
As the NYSE explores the possibility of enabling 24/7 stock trading, the financial landscape may undergo a significant transformation. Embracing continuous trading could reshape investor behavior and market dynamics, aligning traditional stock markets with the round-the-clock nature of cryptocurrency trading. While challenges and regulatory considerations persist, the potential benefits of 24/7 trading are worth exploring for the future of the financial industry.
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