The recent approval of SEC for 24X National Exchange to operate nearly round-the-clock trading is being hailed as a landmark moment in the evolution of the U.S. stock market. 24X is backed by Point72 Ventures of Steve Cohen and aims to redefine trading with 23-hour sessions five days a week.
A couple of more platforms including Robinhood and Interactive Brokers have already ventured into after-hours trading. It is probably a respond to the growing demand among traders to act on global news and at any time. 24X takes the concept further and is promising a seamless trading experience from Sunday evening to Friday evening. The trading will have just one hour of break daily. Its proponents including 24X CEO Dmitri Galinov argue that such accessibility is important for traders and especially to such traders whose geographic locations don’t align with U.S. market hours.
Convenience comes with challenges and critics are pointing out the dangers of trading in less liquid and more volatile overnight markets. Retail investors are often lured by the prospect of quick profits and may find themselves at a disadvantage position in such a market that is equipped with fewer participants and wider price swings. Advocacy groups like Better Markets warn that the conditions could lead to losing money by retail investors due to unfavorable prices.
The move simultaneously also signals a broader shift in the financial space. The New York Stock Exchange had earlier filed to extend its trading hours to 22 hours a day. It reveals that the idea of 24/7 trading is gaining attention lately.
Innovation in financial markets is necessary, but it must be balanced with robust safeguards to protect those who are most vulnerable.
