fbpx

Trading Stocks Around The Clock

by | Jun 21, 2020

Doesn’t it feel almost inevitable?

That in the near future we’ll be able to trade shares 24 hours a day, five days a week?

COVID-19 has most definitely shaken the world when it comes to making contact, being in public places or even just working in an office.

In fact, I’ve been in full isolation for seven days since I found out I was found positive with the virus… Luckily, I have only had bronchitis like symptoms and now on the quick path to recovery.

Well, during the last week, I’ve been wondering what the future of trading will look like and what we need to prepare for.

In this article, we’ll go through the practicalities of trading 24hour markets and what you may need to prepare for.

24 Hour markets available today

Right now, there are more markets available to trade 24 hours a day than ever before including:

• Forex
• Commodities
• Crypto-currencies
• Exchange-Traded-Funds
• Indices

I guess the important question to ask is…

Will it make a big difference if the world opened up to trading stocks 24 hours a day?

Could it be the end of stock traded sessions?

Currently, the trading sessions for shares are restricted to the hours the exchanges are opened.

This is normally from 9:00am until 5:00pm.

There are two historical reasons for having stock traded sessions:

Maintain liquidity and timing for efficiency during operating hours.

But what would happen if stocks never closed their trading times?

Think about it…

We’d have hundreds of thousands of stocks open to the public to trade at your disposal whenever you desire…

We’ll need to address the pros and cons of how this would work…

GOOD & BAD reasons for trading
stocks around the clock

Let’s start with the BAD.

BAD #1:
Less trading – Small price moves

We could see thin volume of buying and selling taking place for each stock, as there’ll be little demand when people are off work or asleep.

BAD #2:
Higher price manipulation

With the low trading volume, this can incite shady investors and traders to manipulate the share prices, causing major sudden price fluctuations

So with low demand and movements for stock trading around the clock – right now, it just doesn’t seem to be practical having 24/5 stock trading sessions.

But right now – does not mean it will always be like this in the future.

Here are the GOOD reasons for a 24 hour trading stocks around the clock.

GOOD #1:
Higher employment numbers

Most companies, will need to employ more brokers and dealers – for after hours – until they incorporate robo-advisors…

GOOD #2:
No more open price gaps

The unexpected sudden price gaps on stocks will almost be eliminated.

You won’t have to wake up to a nasty surprise seeing the market jump your stop loss overnight again.

GOOD #3:
Follow international events

We will be able to base stock trading decisions and prices on any news event, earnings and ratings that comes out internationally.

GOOD #4:
New stream of investors

This will attract many new investors and traders to trade stocks from other countries which will help companies share liquidity.

Why we could see trading stocks around the clock in the future

We are seeing a major rise in the number of investors and traders. 

 

Trading has never:

•    Been more affordable 
•    Been easier to learn.
•    Been more accessible (with just a smart phone).
•    Shown such superior customer services.

And we definitely have the technological structure and networks, to support around the clock trading for all markets. 

And when it comes to stocks. 

Well, with the increase in adoption of new technologies, and improvements with off-market liquidity – we will very well see stocks trading around the clock.  

And now you know what to prepare for… 

Trade well and look after yourself,

 

 

Timon Rossolimos

Founder, MATI Trader

Author Note:
It took me 7 years to find my one trading ‘outfit’
If you’d like to skip the entire learning curve and adopt and profit with my only trading strategy send me a blank email and claim a R1,000 discount by clicking here…

 

PPS: Did you watch the MATI Trader Video for the week? Click below to catch up.