Having 24/7 trading day used to be a dream for equity traders. It’s not entirely a reality, but its closer than you might think. The New York Stock Exchange has announced plans to extend weekday trading on its NYSE Arca equities exchange to 22 hours a day. How this all plays out remains to be seen, but it looks like at a minimum traders’ hours will be even more around-the-clock.
There is an old trader analogy that comes to mind — “Don’t drink and trade!” You can bank on the notion that seeing even more smartphones and laptops at bars and at dinners is absolutely positively going to be more frequent for financial professionals and active traders. That’s not a prediction. It’s an absolute predetermined fact.
The NYSE is owned by Intercontinental Exchange, Inc. (NYSE: ICE) and this may bring the NYSE closer to resembling ICE’s commodities trading. According to the release, extended trading would take place from 1:30 am to 11:30 pm Eastern Time on all weekdays except for holidays.
Some investors and financial market professionals may doubt the likelihood of approval here. The reality is that financial exchanges have been exploring around-the-clock trading for more than a decade. Actually, let’s just call it (more than) two decades at this point. This is a discussion for giving close to 24/7 market access that has been around since the rise of day traders in the late 1990s.
Before this seems completely out of the scope of reality, keep in mind that most U.S. active trading platforms already have trading access for stocks and ETFs well outside of the 9:30 am to 4:00 pm Eastern regular trading day. Those active trader platforms allow for NYSE-listed and NASDAQ-listed stocks and NYSE Arca-listed ETFs from at least 7 am to 8 pm Eastern Time.
While the NYSE announcement calls NYSE Arca the largest exchange for ETFs, the NYSE announcement does say that all U.S.-listed stocks, ETFs and closed-end funds will also be available for trading on NYSE Arca during the 22-hour weekday sessions.
The announcement says:
“The NYSE’s initiative to extend U.S. equity trading to 22 hours a day, 5 days a week underscores the strength of our U.S. capital markets and growing demand for our listed securities around the world. As the steward of the U.S. capital markets, the NYSE is pleased to lead the way in enabling exchange-based trading for our U.S.-listed companies and funds to investors in time zones across the globe.”
Friday’s press release also noted that NYSE plans “to file updated rules with the Securities and Exchange Commission for the extended trading.” It will almost certainly receive that approval, if it doesn’t have the nod from regulators already. Again, this has been at least two decades in the making.
The NYSE is also set to seek support for extended trading from the U.S. securities information processors. The Depository Trust & Clearing Corporation will continue to clear the trades and it has also announced plans to extend its operating hours.
If you thought it was already stressful being a trader or financial professional, it just became even more magnified. And remember — Don’t drink and trade!
