The United States Securities and Exchange Commission (SEC) approved a 24-hour stock exchange market, set to launch in the second half of 2025. This appears to be an aim to keep up with the growing crypto markets. The 24-hour exchange, which is backed by billionaire Steve Cohen’s 72 Ventures fund, will launch first in regular hours and then will expand to include nightly hours between Thursday and Sunday once broader market infrastructure is in place.
Tight rules that have been in place for stocks in order to protect investors and the time and complexities required to carry out a trade are some of the reasons why they have been lagging behind currencies and treasuries.
For traders in regions like Kenya, this development will make it more convenient by allowing them to engage with the U.S. markets during their local time zones. Perhaps it will cement US markets as a go to place for listing. The move is going to help iron out fear while trading when a company waits until after hours to announce quarterly results. It is also going to be good for options and futures markets where a 24-hour model is more reflective of that type of trade.
However, this disruptive idea is not without risk. There is a possibility of exacerbating stock movements by giving people more time to pile on or exit their positions.
One cannot fail but notice that this move appears to be an attempt to keep up with the eventual 24-hour trading that crypto exchanges offer. Critics also worry that introducing a 24-hour model might bring some of the problems associated with the crypto market such as lack of regulation and high volatility into the stock market which is very dangerous if it is not properly regulated.
The approval comes just weeks after the New York Stock Exchange filed an application to expand its own trading day to 22 hours. The move underlined the growing appeal of night-time dealing, even as many institutional investors are worried light overnight trading volumes could allow small trades to have an outsized effect on prices.
Whether this is going to be beneficial to retail traders or ‘whales’ remains to be seen; cases can be made for both sides. Institutional investors have been able to move markets before the start of the trading day based on info disadvantaging retail traders on the other hand institutional investors are going to be able to hire teams for 24-hour market monitoring while retail investors may have a problem monitoring the market for 24 hours.
