A startup securities exchange aimed at handling trades around the clock has received approval from U.S. regulators to operate five days a week, 23 hours a day.
The U.S. Securities and Exchange Commission (SEC) wrote in a notice released on Wednesday that the 24X National Exchange has been authorized to begin offering trading sessions across U.S. daytime, with overnight trading to follow. The exchange will retain a one-hour break starting at 7 p.m.
The proposal to allow non-stop trading has caused a divide on Wall Street, with supporters arguing that investors want greater ability to react quickly to news outside of U.S. market hours. Opponents warn that reduced trading volume could affect trade quality, leading to less accurate pricing.
"The SEC's approval of our new exchange is an exciting milestone that the 24X team has been working towards for years," said Dmitri Galinov, founder and CEO of the exchange, in a statement. He said, "When the market closes in a trader's region, the risks faced by traders are the highest."
According to the proposal, 24X will offer three trading periods, starting at 4 a.m. in New York and lasting until 7 p.m. According to the SEC's order, once certain data requirements are met, the trading venue may add an overnight session from 8 p.m. to 4 a.m. This schedule will run from Sunday evening to Friday evening.
Since the outbreak of the COVID-19 pandemic, overnight trading has become increasingly common, with companies like Robinhood Markets Inc. and Interactive Brokers Group Inc. allowing customers to buy and sell U.S. stocks on the Blue Ocean alternative trading system 24 hours a day, five days a week.
The New York Stock Exchange recently submitted its own application, hoping to offer 22 hours of trading on weekdays, highlighting the growing interest of trading venues in capturing this business.
The SEC's approval of 24X's application quickly drew criticism from consumer advocacy group Better Markets, which predicted this would harm investors and the market.
Benjamin Schiffrin, the group's securities policy director, said in a statement: "When retail investors trade during overnight hours, there are few buyers and sellers in the market, price volatility is greater, and it's less favorable than during normal hours. This means that during overnight trading hours, retail investors can only get the best prices in a bad market, resulting in losses when trading during regular business hours."
Article forwarded from: Jin Shi Data
