Cboe Global Markets announced its intention to introduce 24-hour trading, five days a week, for U.S. equities listed on its Cboe EDGX Equities Exchange, pending regulatory approval from the Securities and Exchange Commission (SEC). This move is driven by increasing demand from international investors, particularly in the Asia-Pacific region, who seek greater access to the U.S. equities market.
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Expanding Access to US Markets for Global Investors
Cboe’s proposal aims to bridge the time zone gap for investors in Asia-Pacific markets like Hong Kong, Japan, Korea, Singapore, and Australia. These investors currently have limited access to U.S. trading hours, hindering their ability to react to market events and manage their portfolios effectively. Oliver Sung, Cboe’s Head of North American Equities, emphasized the growing demand from these regions for expanded trading access. This initiative directly addresses these needs, potentially boosting liquidity and participation in the U.S. market.
Currently, Cboe offers extended trading hours from 4 a.m. to 8 p.m. ET. The proposed 24/5 schedule would eliminate the overnight closure, allowing continuous trading throughout the week. This significant change reflects a broader trend towards greater accessibility in financial markets.
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Following a Trend Towards Extended Trading Hours
Cboe’s move follows a similar proposal by the New York Stock Exchange (NYSE) in October. The NYSE explored extending its Arca exchange’s trading day to 22 hours for U.S. stocks, exchange-traded funds (ETFs), and closed-end funds. This proposal, if implemented, would allow trading from 1:30 a.m. to 11:30 p.m. ET, significantly broadening the current extended trading window.
Both Cboe and NYSE’s initiatives highlight a growing recognition of the need to adapt to the demands of a globalized investment landscape. With increasing interconnectedness and 24/7 news cycles, the demand for continuous market access is becoming more pronounced.
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Potential Impact and Future of US Equities Trading
The shift towards 24-hour trading could have profound implications for market liquidity, volatility, and participation. While increased accessibility benefits international investors, it also presents challenges for market makers and traders who need to adapt to continuous trading operations. The SEC’s review of Cboe’s proposal will likely consider these factors, as well as the potential impact on market stability and investor protection.
The move towards 24/5 trading signifies a potential transformation in the U.S. equities market. If approved, Cboe’s initiative could pave the way for a more globally integrated and accessible marketplace, reshaping the landscape of U.S. equity trading for years to come. This development warrants close attention from investors and market participants alike, as it could significantly alter trading strategies and market dynamics.
