This is what I posted on the "EXTENDED HOURS SUCK" thread...
YES: to extended hours. NO: to 24/7 trading.
I have no problem with extended hours. However, they should not be so extended that we go to 24 hour trading. There should be "natural" breaks every so often (so daytraders can at least go to the bathroom sometime!)
The current state of S&P 500 futures trading offers a glimpse into what the future might hold (and what I hope it will hold). The S&P futures (spoos) trade until 4:15 pm Eastern time (15 minutes later than the stock market itself). The floor then closes, and a while later Globex (computerized) trading opens up and goes all night until 9:15 am. In my opinion, this is an excellent scheme. The breaks (although short) provide a clear delineation between "the day session" and "the night session". Since no sane individual wants to trade day and night, 4:15 pm provides a place for the avid market watcher to
say, "Okay, the battle is done for today. Let's get on with other things." Now of course, if a war breaks out or some extreme event occurs, the trader can have a beeper or something wake him or her in the middle of the night to warn when the market moves in an extreme fashion, and s/he can go trade some Globex. But most nights, we hope, the trader gets an uninterrupted sleep.
The record will show that there are AMPLE swings between 9:30 and 4:15 for S&P daytraders to ply their trade, so to speak. The Globex night sessions are very thin in comparison, except during big, rare events.
I submit that extended hours in the markets for individual stocks, IF they occur after some break of time to delineate the DAY session from the NIGHT session, will have similar results to the S&P Globex experience. Namely: most of the time, Globex might as well not exist, but occasionally Globex is found useful to help one speculate and hedge during extreme political/economic event times.
How about this proposal:
Close the exchanges at 4 pm as usual. Reopen them at 5 pm and keep 'em open all night until 8 am. The breaks will give companies a chance to release news and let everyone but the die-hards stop trading. To Herc's question, "When will [stock investors/traders] sleep, eat out, or relax?" I answer that there are already lots of S&P futures traders who don't bother too much with the night session. The same will happen with stocks. Most of the time you will be able to go about just as before by stopping at 4 pm. Occasionally some news may cause volatility in the night session on a stock, but hey, now you may be able to trade the movement into the next session, rather than just waking up to a big opening gap. |
