[Ripcord09]

Until 1952, Wall Street didn’t believe in taking Saturdays off. The US stock markets ran for five and a half days a week. Until September that year, when they finally switched to a five-day trading schedule. To make up for the lost hours, they simply stretched weekday sessions by half an hour.

Trading hours have gradually crept upward since then. In 1974, the New York Stock Exchange (NYSE) pushed its closing bell from 3:30 p.m. to 4 p.m., adding an extra half-hour. Then, in 1985, it started opening its doors 30 minutes earlier at 9:30 a.m. Fast forward to October 2024, and NYSE Arca made an even bolder move. It announced plans to extend trading to 22 hours on weekdays.

Just days ago, NASDAQ’s President Tal Cohen revealed plans to enable 24-hour trading on weekdays.

Gone are the days when traders had to physically crowd the stock exchange floor, shouting buy and sell orders at the top of their lungs. But now all it takes is a few taps on a phone or clicks on a computer.

Foreign holdings of US equities hit a staggering $17 trillion in June 2024. That’s a whopping 97% jump since 2019. And that also means over a quarter of the total $62 trillion US equity market is now held by investors outside the country.

But hey, there’s a reason why stock markets have always had fixed trading hours. It’s because fixed timings play a crucial role in keeping markets efficient, especially when it comes to liquidity.

Imagine if the store never closed. People would trickle in at random hours, and the bustling energy of peak shopping times would disappear. That’s exactly what could happen with stock markets if they stay open round the clock.

Earnings reports, for instance, are usually released before or after regular market hours to prevent massive panic-driven buying or selling. But with 24/5 trading, that buffer disappears.

Extending trading hours doesn’t just mean letting computers do all the work. You still need people — traders, brokers, compliance officers, exchange staff, working in shifts to keep things running smoothly. More hours mean hiring more people, and that’s an added expense.

Unlike crypto, where transactions happen instantly, US stock markets still operate on a T+1 settlement cycle. Meaning, trades don’t settle the same day (T+0). So in a market that never sleeps, settlements still lag behind, and that makes NASDAQ’s dream logistically complicated.

Interestingly, a research paper backs this up. It says, “We estimate that, as long as there is a closure for some time, most of the benefits are accrued, implying that it is likely a 23/7 exchange would be beneficial over the current popular market design of 6.5/5.”

Should we move to a 24/5 trading like Crypto? Share your thoughts.

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[alpha1]

Come again, what is the purpose of stock market?
To trade the partial ownership that we hold with someone else anonymously, based on the information (old as well as new) that we carry. That information may change anytime, during the day or at night.

In this era of digitalization and connectivity, why should I wait till next day morning to take action on new piece of information that I received in the evening hours?

What physical and infrastructural limitations exists to prevent this today?

But hey, there’s a reason why stock markets have always had fixed trading hours. It’s because fixed timings play a crucial role in keeping markets efficient, especially when it comes to liquidity.

Imagine if the store never closed. People would trickle in at random hours, and the bustling energy of peak shopping times would disappear. That’s exactly what could happen with stock markets if they stay open round the clock.

Baloney. Extremely wrong example since people tend to visit shopping areas when they have free time.
It just happens that most people have most free time during weekends because they are busy giving 90 hours per week to their employers.

If stock markets are open round the clock, then trading will take place round the clock, because most of the people indulging in trading are doing it for employment (to make money), not based on their free time availability.

Earnings reports, for instance, are usually released before or after regular market hours to prevent massive panic-driven buying or selling. But with 24/5 trading, that buffer disappears.

Circuit breakers are present in each stock market for precisely this reason. World disasters and consequent panic do not obey our 8-hour work and 8-hour sleep schedule, and often do happen within the stock market working hours.

[Jeroen]

I don't think the shop analogy is valid. We have shops open 24/7 in many parts of the world already.

When I grew up shops were always, by law, closed on Sunday, Monday morning and opening times were restricted between 09.00AM to 18.00PM.

Of course, over the last decades those mandatory restricted opening hours have largely disappeared. We live in the biblebelt of the Netherlands and when we moved here in 2017 all shops were still closed on Sundays.

Sunday shopping has started here less than two years ago, whilst it was common practice in most parts of the country for decades.

What is amazing is that adding an extra day of opening, does increase overall trade. You would think that people don't do more supermarket shopping, just because the opening times have increased. But they do and the same is true for almost any type of shop.

So increase of opening times of the stock market is likely to see a substantially increase in trade. Whether that is a good thing or not depends, I believe, on a broad view how you believe the financial sector should function as part of your society. More stock trading does not equate more income and wealth equality in society. In fact one could argue that it does often the opposite, increase the divide.

If anything it means quite some new rules on how companies need to communicate with the world.

I don't have a scientific or factual solution, but in general I think our world/societies could do with less 24/7 hassle and bustle. The idea of everything being done immediately and constantly does not resonate with me at all.

Jeroen

[SmartCat]

Off topic, but are casinos open 24/7?

[sandeepmdas]

The algorithms of almost all Technical Analysis indicators will end up in trash. Most of them are depending on Close Price and / or Open Price.

Goodbye Bollinger, Kaufmann, Ichimoku, MACD, Three Walter White Cows...

[Jeroen]

Originally Posted by SmartCat

Off topic, but are casinos open 24/7?

Yes, they are in many parts of the world!

You go to Las Vegas you can shop, gamble, get married, go to gun range all 24/7!