SEC Approval of First 24-Hour Stock Exchange
The Securities and Exchange Commission has given the go-ahead for the very first 24-hour stock exchange in the US. The exchange, known as 24 Exchange (24X) and supported by Steve Cohen’s Point72 Ventures, will have two phases to its launch.
Initially, the exchange will operate during regular market hours. But the big news is that it will eventually expand to overnight sessions from Sunday to Thursday, running from 8 PM to 4 AM. This move comes in response to the increasing demand from retail investors to have trading access outside of traditional market hours, especially since many are used to the 24/7 trading in cryptocurrency markets.
Dmitri Galinov, CEO and founder of 24X, explains that traders are often left vulnerable when the market is closed in their respective locations. This new exchange seeks to address that gap by offering a regulated market where trades are officially recorded, unlike the existing after-hours trading that takes place in “dark pools.”
Despite this exciting development, some institutional investors have expressed concerns about potential market volatility during overnight sessions, where trading volumes tend to be lower. Tyler Gellasch, CEO of Healthy Markets Association, warned about the possibility of small trades overnight leading to significant price movements that could impact larger positions.
As the New York Stock Exchange also looks into extending its trading day to 22 hours, it’s clear that the industry as a whole is moving towards longer trading hours. But before 24X can kick off its overnight sessions, it needs to collaborate with rival exchanges to effectively manage the consolidated price tape system.
This approval represents a significant milestone in the evolution of the US equity markets, which have historically been constrained by settlement complexities and investor protection regulations. In contrast, other markets like Treasuries and major currencies have operated almost continuously for a long time.
