The United States Securities and Exchange Commission (SEC) has granted approval for the creation of a 24-hour stock exchange. It represents a notable advancement in the landscape of global financial markets, this approval which was issued on Thursday, November 28 facilitates the introduction of continuous trading.
Steve Cohen’s Point72 Ventures supported startup, 24 Exchange got authorisation for its two-phase strategy. Initially, the exchange will function during regular trading hours with its plan to expand into evening sessions and ultimately it looks forward to providing interrupted trading from Sunday to Thursday, as reported by The Financial Times.
Certain assets like Treasuries and major currencies are already traded nearly continuously throughout the week. Stocks are getting hindered by the strict regulations that aim to safeguard investors and the complexities that are linked with trade settlement.
People in favour of continuous trading state that it enables investors to react swiftly to market-altering news outside of standard hours. Conversely, detractors warn about the potential risks such as diminished trading volumes during off-peak hours which may result in less precise pricing.
The New York Stock Exchange has recently submitted a request to extend the normal trading hours to 22 hours per day which clearly indicates an increase in the competition within the sector.
This approach makes sure that trades and prices are publicly documented which could improve pricing accuracy for the investors. However, there are concerns about unintended price fluctuations during the time of low trading volume.
Experts have expressed their thoughts about the potential for chances of unpredictability in overnight trading, even the trades done in small volumes could disproportionately influence the pricing. Hence it could pose risks for the institutional investors who manage substantial profiles.
Thanks for choosing to leave a comment. Please keep in mind that all comments are moderated according to our comment Policy.