Grasso Tells NYSE Members Night Trading May Not Be
Profitable
Bloomberg News
May 26, 1999, 5:07 p.m. PT
Grasso Tells NYSE Members Night Trading May Not Be Profitable
New York, May 26 (Bloomberg) -- New York Stock Exchange
Chairman Richard Grasso told members he doesn't expect evening
trading to be profitable, though it may be necessary to prevent
the world's largest stock market from losing business.
During a meeting at the exchange, Grasso said he'd prefer
that the securities industry complete its most important projects
before adding hours. These include converting stock price
increments from fractions to decimals and grappling with computer
problems associated with the year 2000.
''He thinks extended hours at this time are a bad idea,''
said Richard Rosenblatt, who attended the meeting and owns a
brokerage that services institutions. ''He doesn't think it's in
the public interest. But he will not permit our competitors to
offer markets in listed securities without the New York Stock
Exchange providing a better alternative.''
Eclipse Trading, a New York company, plans to offer evening
trading this summer, primarily for investors who buy and sell
online. Other firms have similar plans, and the Nasdaq Stock
Market, the Big Board's chief rival, has discussed introducing an
evening session as soon as September. Grasso told members, who
include floor brokers and specialists who make markets, that the
NYSE will be prepared for evening trading in the second week of
July.
The Nasdaq, a screen-based market, is considering trading
from 5:30 p.m. to 9 p.m. each night. The NYSE is looking at a 5
p.m. to 10 p.m. session. Regular market hours are 9:30 a.m. to 4
p.m.
Nasdaq Hours
At a meeting of small brokerages last night, Richard
Ketchum, president of the National Association of Securities
Dealers, said Nasdaq has no intention of trading NYSE stocks in
an evening session. Grasso expressed skepticism about that
pledge, members said.
Ketchum said he, too, is unenthusiastic about extended hours
but is being driven by competition. The Nasdaq originally
considered adding hours this summer. Now the earliest start date
is September, Ketchum said. Grasso had originally proposed longer
hours for mid-2000.
Many of the hundreds who attended the NYSE meeting expressed
their support for Grasso's position with a show of hands,
Rosenblatt said. Grasso reiterated that evening trading would
occur auction-style on the exchange floor.
The Nasdaq board met today, and its parent, the NASD, may
take up extended hours tomorrow, officials said. The NYSE board
meets June 3.
Brokerage executives are concerned their employees and
computers will be overwhelmed by additional hours. Like Grasso,
they question whether the extra volume will offset additional
costs. Though the industry has conducted extensive ''Y2K''
testing, they share Grasso's anxiety that some computers may foul
up transactions after Jan. 1 by interpreting ''00'' as 1900
rather than 2000.
''There are only a certain amount of resources to go around,
and priority No. 1 is Y2K,'' said Matthew Johnson, managing
director in charge of Nasdaq trading at Lehman Brothers, the
fourth-largest U.S. securities firm. ''Anything else would pull
resources from Y2K. You can't just pull a switch and keep the
market open for another few hours.''
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