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Strategies & Market Trends : After Hours Trading(ECN)-The Coming 24/7 Trading Explosion -- Ignore unavailable to you. Want to Upgrade?

To: Cash who wrote (25)	4/8/1999 12:51:00 PM
From: C	Respond to of 314

Cash, <<The possibilities are endless>> You've got that right! I give myself a headache thinking of all the ways investing/trading would change. C

To: Cash who wrote (25)	4/8/1999 8:12:00 PM
From: Tai Jin	Read Replies (1) \| Respond to of 314

Nice post. I originally thought that 24hr trading would be great, but then I realized that it won't change much. The biggest change will be an increase in the effective trading hours. What I mean is the "open" may occur earlier and the "close" may occur later. I would define the "open" to be the time period when sufficient liquidity enters the market and the "close" to be the time period when most of the liquidity leaves the market. These will likely occur during a window of time (say, an hour). However, no one wants to miss the action, so there is a natural tendency for everyone to converge on a specific open and close time. I'm not sure fund managers would be affected much because they usually negotiate a price with a MM anyway, so it doesn't really matter how the stock traded overnight. Note that Instinet trades (where funds typically do their trades after hours) usually have no impact on the market and vice versa. During the night a lack of liquidity would likely mean much wider spreads and very few trades, similar to how illiquid stocks trade during the day but probably more exaggerated (just look at the ISLD book after market closes and you'll see a huge spread between bid and ask). No one wants to trade in an illiquid market. Everyone will still gravitate to where the liquidity is, and that will still be during the day. However, this is not to say that there won't be liquidity in certain stocks during the night (or at least the "open" and "close" for some stocks may be earlier and later, respectively, than other stocks). These are probably the stocks which are momentum plays. ...tai