The exchange's current hours of operation can be a hurdle for U.S. investors, too.
Andrew Crowell, vice chairman of wealth management at D.A. Davidson, says a 24-hour market would be convenient for traders who have theories they'd like to test out by buying shares or selling shares ahead of open.
“People want to express their investment philosophy, and they don't want to wait for the whole world to wake up,” he adds. “They want to be able to silently get ahead of the crowd.”
While expanded hours would give these investors the opportunity to follow through on their instincts, a decision by the NYSE to move to round-the-clock hours could also come with consequences.
For one, the 9:30-to-4 schedule serves as sort of a guardrail, preventing many investors from making impulsive decisions in reaction to their emotions or the news.
That's no small thing, since research suggests that the most successful investors are usually the ones who ride out the highs and lows and stay committed to their overarching goals... which could be undone by having access to the market a 24/7 (or 24/5, for that matter).
“The long-term goal is to allocate properly, hold on and be committed to your investment plan,” Crowell says. “I do worry that on a 24-hour, Monday through Friday exchange, people will panic at the wrong time — that second glass of Chardonnay is not a good precursor to making a buy or sell decision on a Tuesday night.”
There’s also a risk associated with price discovery, which is the act of determining a price for an asset. Because volumes are highest at the opening and closing bells, Crowell says, that’s when investors can get the truest reading of what something is worth.
“To get the most accurate, available price in the marketplace, you want to have the most trading volume possible,” he says. “The difficulty with a 24-hour exchange would be that if Julia wants to sell her shares at 2 in the morning, there's going to be a buyer — but that buyer could have an undue impact on being able to dictate price to you.”
Admittedly, not everyone would upend their schedules immediately. Guild predicts the largest volume of stock trading would still come from U.S. institutions, and those trades would still happen during the day, if the NYSE were open 24 hours.
That means it would be extra-important for traders to be careful about what they're getting into, given that the market can react in one way during lower-volume sessions and a different way way during high-volume ones.
Even so, Guild says she's hopeful a 24-hour stock market would make price movement a little less volatile. Think: If expanded hours led to more round-the-clock volume, we could see more diverse opinions about a stock rather than just a few players’.
And if those players are smart about it, they could make this work to their advantage.
“If you really are committed to staying disciplined, being able to trade 9 o’clock at night Eastern shouldn't change your strategy,” she says.
Home warranties? Totally fetch. Why? Because a $15,000 repair bill is exactly the kind of drama you don’t need. So if your AC decides to go all Gretchen Wieners on you and randomly breaks down, a home warranty could help cover the cost of repair or replacement. You can save yourself money, stress, and sweat. (Gross.)
