Will round-the-clock trading keep financial advisors up all night?
The New York Stock Exchange, part of Intercontinental Exchange, recently announced plans subject to regulatory approval to lengthen weekday trading on its NYSE Arca equities exchange to 22 hours a day. The NYSE said all US-listed stocks, ETFs, and closed-end funds would be open for trading on NYSE Arca during these extended sessions.
The NYSE’s move follows an industry trend of increased trading availability on public markets. Last year, Robinhood and Interactive Brokers began offering overnight trading in single stocks. Other platforms including Charles Schwab and Webull have followed suit by adding off-session trading options in the months since.
“The NYSE’s initiative to extend US equity trading to 22 hours a day, five days a week underscores the strength of our US capital markets and growing demand for our listed securities around the world,” said Kevin Tyrrell, head of markets at the NYSE in a statement.
Matthew Liebman, CEO of Amplius Wealth Advisors, said having more hours in the day to trade will likely not have a large impact on the way he manages wealth. That said, during periods of extreme volatility, he said a longer trading day may allow him to invest more opportunistically from time to time.
“Like most investment innovations, there will likely be some positive outcomes and some negative results as well,” Liebman said. “On the positive side, longer trading days could increase liquidity and lead to better trade executions. On the negative side, though, for clients or advisors that have trouble sitting still with their portfolios trading around the clock may be harmful to both their financial and mental health.”
Elsewhere, Eric Flynn, head of wealth management at Compound Planning, said there ultimately will be adjustments in the advisory business due to the change in trading availability. While he does not encourage frequent trading in client portfolios, the system change to increased transactions will inevitably ripple across the financial landscape, he said.
“The extended hours will definitely be an adjustment from a staffing perspective, with longer hours or multiple shifts to accommodate the extended trading window. At some point, we could see 24-hour trade team availability as a differentiator for firms trying to offer a higher level of service to their clients,” Flynn said.
Despite the change he sees forthcoming, Flynn said increases in access and transparency are “always a good thing” for investors. And, like any change to the system, he expects there to be an adjustment period for the industry to adapt to the new rules. In this case, however, he expects the industry to adapt quickly since most of the trading is done via technology.
“Transparency and ease of access for investors is always better for the industry, as it reduces barriers. However, it could be too much of a good thing with near 24-hour trading, but a good chance for advisors to educate their clients on the new access. Just because you can trade all night doesn't mean you should,” he said.
Finally, Rick Wedell, president and chief investment officer at RFG Advisory, said he is not a day-trader “in any sense of the word,” so the move to a longer trading day is unlikely to affect the way he invests for clients.
Still, he said his firm may expand the hours of its trading operation so that clients can raise cash for distributions or make contributions during a wider window of the day.
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