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Businesses The Almighty Buck

Why 24/7 Trading is a Bad Idea 80

Posted by msmash from the change-is-afoot dept.
The New York Stock Exchange and Nasdaq have applied for regulatory permission to extend their trading hours to 22 and 24 hours daily, respectively. Nasdaq expects to implement round-the-clock trading from the second half of 2026. The London Stock Exchange is considering similar extensions, according to Financial Times. Several retail brokers already facilitate overnight trading through alternative platforms and "dark pools" -- off-exchange venues that operate during non-standard hours. Robinhood began offering all-night trading for select stocks in May 2023, while Charles Schwab announced plans to expand its overnight trading service to 1,100 securities this July. Economist argues that 24/7 trading is a bad idea. The publication writes: The problem with such trading is that price discovery can be fraught with difficulty. In fact, this is partly why institutional investors like dark pools: their lighter reporting requirements, compared with exchanges, allow big orders to be executed without alerting the wider market beforehand, which would move the price. Professionals taking the other side of these trades accept the risks and know how to navigate them. Amateurs, getting a worse price than they might have done in daylight, often do not.

The witching hours are currently when all manner of dull, but vital, post-trade processes take place, from settlement and valuation to the reconciliation of mistakes. Once trading is non-stop, there will be no pause for the financial plumbing to clear. Nor for traders to rest in the knowledge that the market is resting with them, so there is no need to refresh their screens. In today's always-on world, stock exchanges' limited opening hours might seem old-fashioned. But get ready to miss them once they're gone.

Why 24/7 Trading is a Bad Idea More | Reply

Why 24/7 Trading is a Bad Idea

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  • Time to Think (Score:5, Insightful)

    by Roger W Moore ( 538166 ) on Wednesday July 23, 2025 @04:58PM (#65540406) Journal
    I agree it sounds like a bad idea. The stock markets already have tools they deploy during crises that pause trading to give people time to stop and think rather than just react. Having trading stop at the end of the day and other markets around the globe take over gives everyone an automatic long pause to regroup and plan for whatever crisis the markets may be looking at.

    Without this I suspect we will see bigger drops and bigger peaks as there will be less time for cooler heads to prevail.

    • not just a crisis (Score:1)

      by Anonymous Coward
      It's also when earnings releases go out, etc. There's no reason to benefit people who can skim a 10-Q faster. Give people overnight to digest news.

      • Re: (Score:2)

        by drnb ( 2434720 )

        It's also when earnings releases go out, etc. There's no reason to benefit people who can skim a 10-Q faster. Give people overnight to digest news.

        We could always add a new control, a blackout period around earnings releases. Give everyone time to read.

    • Re: (Score:2)

      by sconeu ( 64226 )

      Thanks. I was thinking the same thing. And any government concerned about their economy should block this proposal for this very reason.

    • Re: (Score:3)

      by tlhIngan ( 30335 )

      It's more significant than that - it's about fairness

      You may note that all companies always release earnings report when the markets are closed. This is not an accident - it lets everyone digest the data at the same time, and then plan their trading strategy when it opens. This is less about time to think and more about fairness - if you're a big trading company with millions of servers running AI models, you can ingest and digest an earnings report in milliseconds to come up with a trading strategy. If the

      • Sure, because everyone's order at the opening bell gets treated the same, right?

      • Re: (Score:2)

        by AmiMoJo ( 196126 )

        There should be a rate limit on trades. It could be as low as one second, and still help, but ideally 1 minute.

        For each stock trades would be processed once every minute, on the minute. Any trades made between minutes are buffered and execute in random order.

    • Time to think and time to cool off. Imagine some, let's say, President tweets something insane at 3am. Trading 24/7 would allow - nay, require - people to respond in real time - else risk being left behind - rather than everyone having to wait, digest and think about things before the 9am opening bell. It would foster chaos - sleepless chaos. Sure the futures markets bounce around now in such cases, but that's possibilities, not actuality.

      • I guess I'm not sympathetic to the possibility of "sleepless chaos." What's the real issue? Is it:

        1) You're worried you'll get a price that better reflects an arguable actual value, instead of capitalizing on mere market-inefficient information asymmetry like the people who spent time, money, and attention to have the possibility to do so?
        2) You prefer transactions to happen on private markets in off hours, so that the public can remain ignorant of their existence and import.
        3) You've never heard of optio

    • The stock markets already have tools they deploy during crises that pause trading to give people time to stop and think rather than just react.

      I expect 24-hour trading does nothing to remove such controls. If something hinky happens at 3am the controls kick in just the way they would at 3pm.

      If you need to know about something occurring, set an alert notification for that event. Your phone can go bing and let you know at 3am just like at 3pm.

      • Re: (Score:2)

        by necro81 ( 917438 )

        If you need to know about something occurring, set an alert notification for that event. Your phone can go bing and let you know at 3am just like at 3pm.

        Yes, just what I want: to be woken up by my phone at 3 AM to let me know that automated market bots have crashed my 401(k).

    • Yeah, but then those who can successfully sell the peak and buy the dip will make out even better, and really, isn't that what it's all about?

    • Re: (Score:2)

      by dnaumov ( 453672 )

      I agree it sounds like a bad idea. The stock markets already have tools they deploy during crises that pause trading to give people time to stop and think rather than just react. Having trading stop at the end of the day and other markets around the globe take over gives everyone an automatic long pause to regroup and plan for whatever crisis the markets may be looking at..

      Just one problem. Not everyone around the world lives in the same timezone.

    • While I'm generally suspicious of his "wisdom drops" as efforts at market manipulation and personal enrichment, I actually agree with Warren Buffett's opinion that the market would be healthier if there was a substantial penalty to any share traded less than a year since it was purchased. This would compel traders to be more judicious and eliminate the "churn" of electronic back and forth that adds really no value, only noise.

  • The system is already severely broken. The amount of front-running is ridiculous and Robinhood and Schwab are both guilty as hell, but hardly the only offenders. So retail traders are already at a severe disadvantage, 24Hr. trading might make things worse, but would they be that much worse? I don't know.

    I will say that futures trading has been 24Hr. forever and it hasn't been a significant problem there. Likewise crypto doesn't seem to be significantly negatively affected.

    The big issues that need to change

    • Re: (Score:1, Troll)

      by buck-yar ( 164658 )
      How is it going to make things worse? By giving everyone an even playing field? For a long time, the elite, the superrich, have been able to go to Goldman Sachs, JP Morgan or whoever and dump their shares at any time on any number of dark pools. Average person can't. https://www.youtube.com/watch?... [youtube.com]

      If you watch futures, stocks do a ton of moving early in the AM. Often this sets the tone for the whole day. But right now those trade are for the special, the privileged. It promotes unequalness, tiered syste

      • Yes, but people who don't know how the markets really work have strong opinions to the contrary.

        In the end, though, this is about AI HFT, not economic justice.

      • Frankly, I don't think it matters.

        But right now those trade are for the special, the privileged. It promotes unequalness, tiered systems, where the upper tiers get special rules in their favor.

        Investing isn't really a competition. The current system lets the gamblers and speculators operate 24-7 only trading with one another. That may be an advantage for the people left out. The markets provides a stable means for people who want to invest to invest. This will give them the ability to invest at 3 am instead of 9 am but it also means all the speculating and gambling will be done in the same market at the same time. Like I said, I am not sure it matters, but if it

  • Absolutely terrible idea. (Score:5, Insightful)

    by MikeDataLink ( 536925 ) on Wednesday July 23, 2025 @05:07PM (#65540438) Homepage Journal

    This is only good for the large investment firms. It's terrible for us little people. Terrorist attack at 3AM? All the institutions will have systems (and people) up at 3AM and immediately sell off. All of us regular joes will wake up to being broke.

    I'd say this is something the administration should fix/regulate... but well, we know that they don't care about the little guys.

    • Nah, most systems have an automatic shutoff or lock of stock if they move too much. Also there is already an after-hour, future and a bunch of off market tools for trading or pre-trading. The fact most markets are global and there are people all around the world investing in those stocks makes little sense to be limited to some "business hours."

      • Nah, most systems have an automatic shutoff or lock of stock if they move too much. Also there is already an after-hour, future and a bunch of off market tools for trading or pre-trading. The fact most markets are global and there are people all around the world investing in those stocks makes little sense to be limited to some "business hours."

        It’s rather ironic you point to controls and limits in place because “after-hour” and “pre-trading”.

        As if those concepts are even remotely valid after Greed goes full send on 24/7.

    • What you describe, is literally how it is now. We, the sheep, have to wait until cash open to trade, people with a lot of money can go to these firms. I guess I shouldn't say with certainty, maybe Bill Gates is posting here from his yacht.

      The way it is now, the less money a person has, the more rules and less freedom they have controlling their investments. Its precisely how Robinhood has gained traction, figuring out ways of offering some of these abilities to less well off people.

      • Dude, you can just fill out a form with your broker and get access to after hours trading. There are all kinds of stuff like that. They're protecting you from yourself because they have to. Sign some waivers and do all the after-hours leveraged pre-IPO SPAC trading you want. It's dumb as fuck because if you knew enough to safely do any of that you would know how already, but I for one welcome this financial Darwinism, you all voted for it, enjoy, idiots.

    • Just place stop orders.

    • This is only good for the large investment firms. It's terrible for us little people.

      Given the fact that every recession and depression was never caused by of a lack of 24/7 trading and the fact that large investment firms are often in charge of pension funds at every level, this affects every-fucking-one. Even those that thought they weren’t gambling in a market they couldn’t afford to play in.

      Lets try and not assume the potential for harm would limit itself. It will not. By design.

  • form an union and say no to more hours!

  • One barely has to be anything other than a fan of stock market movies to know not having an Off button in THAT fucking line of work, is asking for insanity.

    And I mean that literally. We thought brokers had it bad after a rough day of trading with a bell sounding the end of the nightmare? Imagine that nightmare never ending. Or the fear of simply waking up to it every day, with FOMO translating into real dollars lost. Cocaine will become as weak as coffee trying to sustain that zombie life.

    The corruptly

    • We thought brokers had it bad after a rough day of trading with a bell sounding the end of the nightmare? Imagine that nightmare never ending. Or the fear of simply waking up to it every day, with FOMO translating into real dollars lost. Cocaine will become as weak as coffee trying to sustain that zombie life.

      Fearmongering into controlling people, the classic liberal philosophy. Why not pass a law saying at no time may someone bid less for a stock? Guarantee no loss from the retirement nest egg that the stock market has become.

      Unfortunately a lot of people like to take away others freedom because they think it might hurt them in the wallet or pocket book.

      • We thought brokers had it bad after a rough day of trading with a bell sounding the end of the nightmare? Imagine that nightmare never ending. Or the fear of simply waking up to it every day, with FOMO translating into real dollars lost. Cocaine will become as weak as coffee trying to sustain that zombie life.

        Fearmongering into controlling people, the classic liberal philosophy. Why not pass a law saying at no time may someone bid less for a stock? Guarantee no loss from the retirement nest egg that the stock market has become.

        Unfortunately a lot of people like to take away others freedom because they think it might hurt them in the wallet or pocket book.

        The Disease of Greed has already consumed our species. Is it really fearmongering when history has proven that fear is valid countless times? Why not support the logic that says humans should be allowed a break from THE most pervasive form of greed ever created? Sleep is a requirement for our species to survive. That’s not optional.

        Lets pretend you’re not even an active participant in the market but you instead own and operate a stock trading firm and 24/7 trading is suddenly allowed. Are y

  • There is little reason to extend trading hours overnight. It is less than 18 hours till you can trade again. Just gives you enough time to think and make sure.

    Also, it lets business make announcements after the close. This gives people time to think about the announcement rather than go off hack cocked. There is a reason they close at 4 PM, rather than 5 PM.

    But from Friday at 4 PM till Monday at 9:30 is over 60 hours. More than 3 times as long. More than 80 if Friday or Monday is a holiday.

    Yes things

    • Just gives you enough time to think and make sure.

      You need a rule or law to force you to do that? Or are you above us and think just the person reading your post needs mandated think time?

  • Whats up with tomorrow? (Score:1)

    by Anonymous Coward

    24/7 ? Thats tomorrow

  • This seems like a quaint idea.

    Many businesses are 24/7. They have no pause for "the plumbing to clear." They figured out how to make it work without a pause.

    Processes can run concurrently. Establish a cutoff time if you need one, then run your process. Or figure out a way to make your process event-driven, instead of batch-mode.

    These ideas are not hard, they just require a different mindset.

  • only gives the house more hours to win, and the rest of us more to lose
  • When calculating taxes on trades the gain on any investment held for less than 14 days is counted double. So, if you made a gain of $1000 dollars on an investment held for less than 14 days, it would be taxed as if it was $2000. Put all the day traders and speculators out of business.

  • Low velocity in the marketplace is not great, because it inhibits price discovery. But we are well past the point where traders at investment banks are actively skimming profits off the market. It is easy to assume that those profits are just coming from other high-frequency traders - but, it reality the aggregate of the HFT profits are coming from the rest of the market, the buy-and-hold investors who's money is sitting in retirement funds. High-frequency trading is like a kind of inflation which is slo

  • Institutional investors will use them anyway. If exchanges "close for the evening" it just means that exchange reported trades will be delayed to the public until the next day.

    The good thing about 7x24 trading is that someone might catch on to what the dark pools are doing and trade on that information. Tipping the hand of the institutional traders.

  • I don't mind the idea of 24/7. I object yo the speed of trading and the short-term thinking it encourages. The big traders aren't "investing", instead they are playing some sort fcweird casino-like game. Only, they made the game, so the odds actually are in their favor.

    How about a tax on transactions: any stock held long-term (say, over a year) is tax free. Graduate down to transactions where the stock is held less than - say - one hour are taxed at 100% of their value.

  • I won't do any trading today or July 24th any year for that matter.

  • Curious how this will affect OHLC data. Will reporting shift from market close to midnight?

  • stoke, heart attack, etc soar. This is a really bad idea.

  • Slashback [slashdot.org]

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