24 Hour Trading

Jordan Hayes jmhayes at j-o-r-d-a-n.com
Thu May 27 08:44:35 PDT 1999


Of course, 24-hour trading isn't new: the currency "market" has been open continuously for years. Even for stocks, Instinet has been providing a 24x7 marketplace for many years. What's new is the idea that the NYSE and NASDAQ are looking to move in that direction to support it. That is, the retail market will be able to participate for the first time. How can that be bad?

From hliu at mindspring.com Thu May 27 07:35:32 1999

No down time for companies to release news.

I presume that the 'trading halt for news' rule would be maintained; it's already the case that specialists (and companies) can request halts in trading under certain circustances to allow news to disseminate. I believe this will bring more pressure on companies to get better reporting discipline :)

No down time for market makers to regroup, thus creating more

volatility and conditions where few stocks can open for

trading.

This sounds like whining; things happen 24x7, and if you can't keep up with tracking them, you don't have any claim to be a market maker. It is precisely the market maker's responsibility to know. It's already the case that many stocks are dual (and N-) listed; you can almost trade IBM 24x5 these days.

[ I'm ignoring for the moment that you *can* trade any stock anyplace

anytime over-the-counter; I'm just talking about the organized

markets here ... ]

The problem of of liquidity is of concern. Buyers may place an

order at an quoted price and wake up finding him/herself paying

12 points higher in the morning.

This is not a liquidity concern; this is an education concern! :)

It's true that once the retail sector kicks in on 24x7, people will have to be taught that just because you put your order in, it doesn't mean there's a contra out there. Who knows, maybe it will lead to market orders defaulting to FOK (fill-or-kill)?

Ultimately, it ought to be liquidity-positive: removing artificial time/space constraints and opening up the market to all interested participants will result in better liquidity across a wider time-frame around the world.

/jordan



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