The Financial Times reported yesterday (22) that the largest stock exchange in the world, the New York Stock Exchange (NYSE), is conducting a market survey on the feasibility of 24/7 securities trading.
Background:
Paypal declares the arrival of the “era of cryptocurrency payments”: people crave a faster and cheaper global financial system.
Supplement:
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The 24/7 trading model in the cryptocurrency market has prompted traditional stock exchanges to plan for follow-up. According to the Financial Times, the NYSE is conducting a market survey on the feasibility of trading stocks around the clock, seeking input from market participants.
It is said that this survey was proposed by the NYSE data analysis team, not initiated by the management. This reflects the increasing interest of investors in trading stocks during non-traditional trading hours from 8 pm to 4 am Eastern Time.
The NYSE survey asks respondents whether they think round-the-clock trading should take place on weekends and weekdays from Monday to Friday, how to protect investors from price fluctuations, and how respondents would arrange personnel to be present during the early morning non-traditional trading hours.
Following the trend of 24/7 trading in the cryptocurrency market
In recent years, round-the-clock trading has become a hot topic due to the increasing popularity of the cryptocurrency market among investors and more retail investors entering the stock market after the Covid-19 pandemic.
Currently, traditional stock exchanges are significantly lagging behind the trend in providing round-the-clock trading. Other major financial markets, including US Treasury bonds, major currencies, and major stock index futures markets, already allow round-the-clock trading from Monday to Friday. Several brokerage firms, including Robinhood and Interactive Brokers, also offer 24-hour stock trading services on weekdays, usually through matching positions held within the platform or through “dark pools” such as Blue Ocean, which are typically used by Asian retail investors for trading during daylight hours.
The Financial Times points out that once stock exchanges open for round-the-clock trading, there will be a significant change in the market’s perception of overnight trading. Compared to “dark pools,” overnight trading is subject to strict regulation, with the NYSE directly regulated by the US Securities and Exchange Commission (SEC). The stability and security will also be tested and rule changes will require approval from regulatory authorities.
SEC reviewing the application for the first 24/7 stock exchange
It is reported that the NYSE’s latest survey was launched after startup 24 Exchange applied to the SEC to operate its stock trading platform 24/7. The SEC will have several months to review and decide whether to approve the application for the first 24/7 stock exchange.
Two sources revealed that the SEC committee has begun holding meetings to study the issues involved in the transition of stock exchanges to 24-hour operations, including who should bear the costs and the need for clearinghouses to operate within the designated time frame.
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