The New York Stock Exchange (NYSE) is canvassing market participants about the merits of round-the-clock equity trading as regulators scrutinize the first-ever application for 24/7 trading.
The NYSE’s survey, part of Intercontinental Exchange, was conducted by its data analytics team rather than its management. However, it underscores the growing interest in allowing stocks such as Nvidia or Apple to be traded overnight from 8pm to 4am eastern time.
The issue has become a hot topic in recent years, driven in part by the 24/7 trading of cryptocurrencies and the surge in activity from retail investors, initially spurred by Covid lockdowns.
Stock exchanges have been relative laggards in a world where other large markets, including US Treasuries, major currencies and equity index futures, can be traded around the clock from Monday to Friday.
The NYSE survey asked respondents whether they thought extended hours trading should occur on weekends as well as during the five-day week, how investors should be protected from price volatility and how respondents would staff any overnight sessions. It also asked whether people agreed that “having more time overnight to consider trades would be better for trading outcomes than trading only during regular market hours”.
The survey comes as start-up exchange 24 Exchange, backed by Steve Cohen’s Point72 Ventures, is seeking approval from the SEC to launch the first 24/7 equities exchange. The filing is a second attempt by 24X, which last year withdrew a proposal after operational and technical issues. As of Friday, no letters had been filed raising concerns with 24X’s latest proposal. The SEC has several months to review the plans.
“I have no idea what kind of volume they will do at midnight. But it is really not up to the SEC to decide whether it is commercially viable,” said James Angel, a finance professor at Georgetown University who submitted a letter in support of 24X’s proposal. “I am in favour of letting the market decide. If it succeeds, we all benefit and if it doesn’t that is on the investors.”
The Financial Times also reported, citing two people familiar with the matter, that the Securities and Exchange Commission has begun meeting to examine issues related to a move to 24-hour trading — including who would bear the costs. Clearing houses, which help settle trades, also currently operate during limited hours.
