Old School Wall Street is considering ’round-the-clock, or 24/7 trading, to prevent crypto from getting a leg up on it. Unlike traditional stock markets, cryptocurrency exchanges operate continuously. Therefore, the New York Stock Exchange (NYSE) owner, Intercontinental Exchange (NYSE:ICE), is contemplating a radical shift – no more opening or closing bells. Yes, you read that right.
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The exchange that sleeps while bitcoin creeps may allow night owls a chance to test their speculative wisdom. Will it happen? Will you get the execution at 2 a.m. that you get at 10 a.m.? There are many hurdles to overcome, but we’ll find out soon enough.
Relentless Cryptocurrency Competition
The NYSE’s move towards 24/7 trading can be attributed to one major force, the relentless activity of cryptocurrencies. Digital assets never sleep; their markets see activity 24 hours a day, 7 days a week. This nonstop accessibility has attracted a new generation of investors, many of whom feel a need to trade whenever their phone sends an alert.
The NYSE, it seems, is feeling the heat. Retail investor activity has surged in recent years, and the exchange is resolved to tap into this growing demographic. Retail or self-directed traders are most available to trade after regular business hours. As an added bonus, a 24/7 marketplace could potentially attract investors from all over the world.
The Not-So-NYSE Roadblocks
While the prospect of buying stocks at 3 a.m. in your pajamas might help free you up at 11 a.m., there are some hurdles to overcome before Wall Street turns into Times Square. One major concern is liquidity, or the ease with which investors can buy and sell stocks. This is because a nighttime market might have fewer participants, making it trickier to find a buyer or seller for your shares.
Another worry is settlement risk. Trades need to be settled, meaning the buyer needs to receive the stock and the seller needs to receive the money. With a 24/7 market, this process becomes more complex, especially when dealing with overseas transactions.
Will We Be Trading Stocks After Dinner and Drinks?
To summarize, the NYSE is currently gauging market participants’ interest in a 24/7 trading schedule. Some experts are cautiously optimistic, believing it could increase investor engagement and cater to the growing global investment landscape. However, the challenges are big and shouldn’t be underestimated.
Only time will tell if the NYSE’s bells will remain muted all year long. Stay tuned.
