Bloomberg reports that the U.S. Securities and Exchange Commission (SEC) has recently approved a groundbreaking proposal from 24X National Exchange, allowing it to operate for 23 hours a day, five days a week. This move, backed by Steve Cohen’s Point72 Ventures, aims to provide a platform where traders can engage with the market almost around the clock, addressing the risk traders face when markets in their local time zones are closed. This approval signifies a shift towards more flexible trading hours, which could reshape how investors interact with the U.S. stock market.
According to the SEC’s notice, 24X National Exchange will initially offer trading sessions from 4 a.m. to 7 p.m. Eastern Time, with plans to extend into overnight trading once certain data requirements are met. This would mean trading could occur from 8 p.m. until 4 a.m., running from Sunday evening through to Friday evening. The one-hour break at 7 p.m. each day is designated for system maintenance, ensuring operational stability.
The concept of non-stop trading has polarized opinions on Wall Street. Advocates argue that extended hours allow investors to react swiftly to global news and events without the constraints of traditional market hours. However, this enthusiasm is not universal. Critics, including the consumer advocacy group Better Markets, express concerns over the potential degradation of trading quality due to lower liquidity during off-peak hours. Benjamin Schiffrin from Better Markets highlighted that retail investors might face more volatile and less favorable pricing conditions overnight, potentially leading to losses that would not occur during regular market hours.
This approval comes at a time when overnight trading has seen increased adoption outside of conventional exchanges. Platforms like Robinhood (HOOD) and Interactive Brokers (IBKR) have already capitalized on this trend by offering 24/5 trading through alternative systems like Blue Ocean. The interest in extended trading hours is further evidenced by the New York Stock Exchange’s recent application to extend its trading window to 22 hours on weekdays.
Dmitri Galinov, CEO of 24X National Exchange, expressed excitement about this development, noting it as a culmination of years of effort aimed at making trading more accessible and responsive to global market dynamics. The introduction of 24X’s extended trading sessions could serve not only institutional investors but also retail traders looking for opportunities beyond the conventional trading day.
However, the implications of this shift are complex. While it promises greater market access and potentially higher liquidity around the clock, it also raises questions about market integrity, investor protection, and the effectiveness of regulatory oversight in less liquid trading periods. The balance between innovation in trading practices and the protection of market participants will be crucial as these new trading hours are implemented.
This significant regulatory nod from the SEC, as reported by Bloomberg, might be just the beginning of a broader trend towards continuous trading environments in the U.S., challenging traditional market structures and prompting a reevaluation of trading strategies across the board.
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