NYSE wants to extend electronic trading to compete with round-the-clock platforms
NYSE wants to extend electronic trading to compete with round-the-clock platforms
The New York Stock Exchange has announced plans to extend after-hours trading.
Pending regulators’ approval, the NYSE’s electronic platform Arca could be accessible 22 hours a day, Monday through Friday — up from 16 hours a day — with a pause between 11:30 p.m. and 1:30 a.m. ET.
While the lights are on at the New York Stock Exchange from 9:30 a.m. to 4 p.m. on weekdays, a growing volume of trades are ordered outside those regular hours on Arca, according to Evan Rawley at the University of Connecticut.
“People in Asia, people in Europe, you know some people in the U.S. after work want to go in and put in a trade,” he said.
The NYSE’s wants to extend Arca’s window by a few more hours; as Rawley noted, established exchanges are facing more competition.
“They’re afraid that people are going to go to, say, Robinhood,” he said.
The app allows users to trade certain stocks around the clock Monday through Friday, so extended after-hours could keep more trades moving through New York’s platforms.
There’s a relatively small constituency rooting for this change, said Justin Schack with Rosenblatt Securities: “And that’s basically retail investors.”
But these nonprofessional traders could end up paying higher transaction costs at odd hours.
Institutional investors and the thousands of companies listed on the New York Stock Exchange “may not be so excited about the prospect of trading going on for 22 hours a day,” said Schack.
In part, Schack added, it’s because they’ll need to staff up to react to late night price moves.
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