The New York Stock Exchange (NYSE) plans to extend the trading hours of its fully electronic trading platform, NYSE Arca. Once approved by regulators, the new schedule will allow trading of U.S.-listed stocks, ETFs, and closed-end funds for 22 hours each weekday.
The extended hours will enable trading from 1:30 AM to 11:30 PM Eastern Time. For Chinese investors, this means that during daylight saving time, NYSE trading could align with the A-share market, closing at 11:30 AM and reopening at 1:30 PM.
This adjustment falls under the category of pre-market and after-hours trading, which still requires regulatory approval. The NYSE has confirmed that DTCC (Depository Trust & Clearing Corporation) will handle the clearing of trades made during these extended hours. DTCC has also announced its own extension of operational hours recently.
Kevin Tyrell, head of NYSE markets, emphasized that the decision to extend trading hours highlights the growing global demand for U.S. equities. The NYSE aims to provide trading access across various time zones worldwide, further leading market innovation.
The move appears influenced by the cryptocurrency market's 24/7 trading model and an increased demand for longer trading hours post-pandemic. Extended trading allows investors to react swiftly to events outside of traditional hours.
Notably, many online brokers such as Robinhood Markets, Interactive Brokers, and platforms familiar to Chinese investors like Futu and Tiger Brokers, have already launched 24/7 U.S. stock trading by partnering with third-party service providers like Blue Ocean.
Due to inherent liquidity issues, current "night trading" options mostly support high-liquidity stocks such as Apple (AAPL, Financial), Microsoft, and the S&P 500 ETF (SPY). However, challenges remain, as demonstrated by service disruptions during Japan's market turmoil in August.
The upcoming U.S. elections present another potential stress test for online brokers and partners like Blue Ocean. The entry of the century-old NYSE into extended hours trading is set to significantly impact the landscape.
In response to global demand for extended trading, NYSE consulted market participants in April. President Lynn Martin stated in May that responsible implementation of additional trading hours requires careful consideration, particularly concerning infrastructure.
Historical changes in U.S. stock market trading hours indicate such reforms aren't uncommon. NYSE initiated continuous trading in 1871, with significant modifications occurring over the years. The exchange introduced after-hours trading in 1991, initially for one hour, then extended over time, and pre-market trading was also later expanded.
