24 Hour Trading

Chris Beggy chrisb at eden.com
Thu May 27 10:16:18 PDT 1999


Jordan Hayes wrote:
>
> 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?
>

Currency markets grew up on their own, unregulated. The fiat money traded doesn't have a claim on any real assets. In principal, securities markets are regulated and the securities represent a claim on dividends, interest and corporate assets.

Just because we have the technology and the interest to trade 24 hours a day, should we? I think it is a good goal to improve market access and efficiency, but 24/7 trading may not achieve this. It is probably worth trying, but I think that currently, most of the volume in equity markets occurs at the open and the close of trading.

I can make the case that moving in the other direction will achieve the goals of equal access and efficiency, too. Make the capital markets a dutch auction (accept all orders and set one market clearing price for each security) and have one, two, or three global sessions a day.

I like trading equities, but my gut tells me that 24/7 trading will increase regulatory, settlement and spread costs in exchange for some convenience.

Chris



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