Poll arises as US regulators assess Steve Cohen-supported plan for a 24/7 exchange.
As regulators review a proposal for the first 24/7 bourse, the New York Stock Exchange is surveying market participants about the benefits of continuous stock trading.
Here are some key points from the provided information:
Survey Highlights Interest in Overnight Trading:
NYSE’s data analytics team instead of management, underscores increasing interest in overnight trading of companies such as Nvidia or Apple from 8pm to 4am Eastern time.
Drivers of Overnight Trading Interest:
Recent years have seen increased focus on the issue, partly due to round-the-clock cryptocurrency trading and rising retail investor activity catalyzed by pandemic lockdowns.
Stock exchanges have fallen behind other major markets, such as US Treasuries, major currencies, and leading stock index futures, which can be traded continuously Monday to Friday.
Current Overnight Stock Trading Options:
Retail brokers like Robinhood and Interactive Brokers provide 24-hour weekday access to US stocks, either matching trades internally or through “dark pool” venues like Blue Ocean, often involving Asian retail investors during their daytime.
Potential Impact of Official Overnight Exchange:
An overnight exchange would significantly alter perceptions of late trading due to stricter regulatory scrutiny compared to dark pools. Exchanges are directly overseen by the Securities and Exchange Commission, undergoing stability and security tests and requiring approval for rule changes.
Exchanges trades contribute to the consolidated “tape,” the official trading price record, potentially setting the tone for regular hours trading with nighttime activity.
In NYSE’s survey, respondents were queried on their views regarding round-the-clock trading extending to weekends, investor protection against price volatility, and staffing for overnight sessions.
The survey inquired whether individuals believed that focusing on overnight trading was preferable to concentrating on regular market hour trading. This inquiry coincides with 24 Exchange, supported by Steve Cohen’s Point72 Ventures fund, pursuing SEC approval for the inaugural round-the-clock exchange. This filing marks the second effort for 24X, which withdrew a proposal last year due to operational and technical challenges.
As of Friday, no letters had been received expressing concerns about 24X’s latest proposal. The SEC has several months to review the plans thoroughly.
“Overnight trading volumes are uncertain. But assessing commercial viability isn’t SEC’s role,” said Georgetown finance professor James Angel, backing 24X’s proposal.
“Market should decide, I say. Succeeds, gain for all. Fails, investors’ loss.”
Two sources say committee overseeing consolidated tape meets, examining 24/7 trading issues – costs, clearing houses’ set hours.
Institutions wary of overnight trading due to low liquidity, settlement risks, other concerns.
Existing overnight offerings let retail traders place limit orders, stating buy/sell prices; unfilled orders expire next morning.
“24/7 trading has demand, but not market-wide,” said one institutional broker, highlighting potential staffing challenges.
“Events occur outside regular hours, requiring monitoring – but different from major Apple news at 2am or Saturday 4pm. How to respond then?”
Since this is just a clarifying amendment note about one of the entities mentioned investing in 24 Exchange, and not a full sentence that needs rephrasing, I will simply acknowledge the clarification.
Noted – This article has been amended to clarify that Steve Cohen’s Point72 Ventures fund has invested in 24 Exchange.
You might also be interested in – Angel One’s stock price jumps more than 8.5% due to outstanding Q4 performance.
