More and more trading in American stocks is coming from abroad. Some of the traders are used to use how to trading in futures, FX and other markets where they offer trading out of American work hours, sometimes 24 hours a day.
As the US stock market goes close to trading “around the clock”, there are some things that we need to think about.
To be fair, trade in American stocks may be already after hours (especially when news). However, the rules of trading are different – and many of investors such as NBBOs have not been implemented.
There are many ideas to trade around the clock, such as when one day ends and the next business day begins. It is not necessary that there should be midnight. Additionally, the industry having a brief moment to allow dividends and dividends and dividends and partitions and other corporate functions – many of which affect prices – are necessary because we migrate our processes to support around watch markets.
For example, if a stock is making a division, limit prices and share volume. Therefore, if a company splits 10 -for -1 stock:
- The price should fall to 1/10th of its previous price, so the market cap (valuation) is the same after division.
- The share quantity to buy and sell should increase up to 10X.
- This is the same before dividing the required cash.
When will it be a good time to do this?
If we look at different times that all the largest stock markets are “officially” open worldwide, the midnight can not be the most logical time to stop the US time market.
Markets are already open in countries like Australia, Japan and Korea in the US at midnight. This means that investors in those countries are also awake and are able to do business (locally).
Chart 1: Official stock market hours for big markets around the world
Interestingly, there is a period soon after coming close to America where no market in the world is open. Japan and Korean markets are not open till 10 pm (New York Time). Even the Globex Futures Market of CME stops every night during this window, stopping trading from 5 pm (New York Time).
When we look at the stock trading activity, based on the time stamp reported to SIP (Chart 2), we see that the period from 4 pm to 6 pm is still exactly busy, and the residual business appears to be high to 8 pm, which SIP itself stops for the night, opening again at 4 pm,
However, when the SIP opens again, trades reported from the period when the SIP was closed, although they are very low when the SIPs are open and cluster around the top-hour.
Chart 2: Volumes shown by Trade Times on SIP on average 24-hour
Maybe midnight (US time) should start tomorrow before
Although it can seem natural to stop the day around midnight in the US, it is important to remember that it is about international investors.
Given the time where international trade can be more active, it may be understood to start tomorrow’s trading before stopping the markets in the evening and officially attacking at midnight.
This is just one of the things that we need to think about changing!
