Comment by gottorf
8 hours ago
Honestly, stocks should trade for three hours a day. 24/7 trading sounds like a win for exchange operators and a loss for anyone else.
8 hours ago
Honestly, stocks should trade for three hours a day. 24/7 trading sounds like a win for exchange operators and a loss for anyone else.
And even that seems kind of generous to me. I see absolutely zero value in stock trading continuously for any length of time. Businesses don't make purchasing or investment decisions in that time span, nothing of significant value can even be created or sold or shipped in those time spans.
Maybe even just a single auction in the afternoon.
I saw this as a serious proposal somewhere but I can't remember where.
There are exchanges out there that run continuously but with delayed information feeds.
The best known (at least in the tech circles - in good part thanks to HN and Matt Levine) is probably IEX. The exchange guarantees that every participant is behind the exact same time delay. And they do that by having a sufficiently long spool of optic fibre between the exchange "broadcast switch" and the market maker computers.
Simple and effective. Relies only on laws of physics to create the delay.
There are also exchanges that run with "frequent batch auction" principles.[0]
0: https://econpapers.repec.org/article/oupqjecon/v_3a130_3ay_3...
Run continuously, non-delayed, but only sweep the order book at a random time every [1,2) seconds. Run for something like our current extended market hours.
Everyone gets the benefit of fast-enough execution and strong liquidity.
Crazy high-frequency gamesmanship goes away. Smart quantitative plays are still possible.
It feels like something Matt Levine would have talked about.
3 replies →
one per week should do it.
I'd settle for once per second. There's a lot of very fast trading nonsense which I've only heard defended with the "liquidity" bogeyman.
A sealed-bid uniform-price batch auction seems like the right action.
2 replies →
Honestly what would happen if the stock market didn't exist. It seems like these days the price of stock is so disconnected from lived reality that genuinely confused if it would be all that catastrophic
16 replies →
If that were true then nobody would show up to trade during the extended hours and therefore absolutely nothing will change.