The equity markets are open from 9:30 am to 4:00 pm Eastern. Trading does occur after-hours, but it's really a 9:30 to 4:00 pm job, or trip, or whatever we want to call it.
It used to be 10 am - 4 pm, until 1985, when NYSE voted to start half an hour earlier to accommodate overseas buyers. Californians weren't happy: they would now start trading at 6:30 am local time.
But the game is a-changing. Markets are different to what they once were, and a good portion of trading is done electronically, and often by automated "bots." And nowadays, many traders sit idle during long stretches between market opens and market closes, during which there is a typical flurry of activity (40% at market close, on average, last week).
Which leaves us to propose two alternatives.
A shorter trading day, say 1 pm - 4 pm. Or splitting the trading day into two trading windows, say 9:30 - 10:30 am and 2 pm - 4 pm.
Here are the many advantages, including several social benefits.
- The markets would be more liquid. Always. (Reducing costs, adding efficiency.)
- There would be more "off-trading" hours for companies to release earnings reports and any other news items that might "shock" markets. (Traders wouldn't have to stick around till 6 or 7 pm to watch Apple release its earnings reports.)
- Traders could spend more time on research & strategy, and less time glued to their ever-changing screens.
- Some traders, if they're only performing a pure trading function, would become cheaper for firms, creating an efficiency. They could take part-time work outside of trading hours, or walk their kids to school.
- Traders could leave the office for lunch with their colleagues without worrying about the market moving on them, promoting healthier working relationships, and driving business to nearby restaurants. Or they could go to gym midday, lowering healthcare costs.
- The west coast traders would no longer have to wake up before the sun rises to start trading, creating more stable family relationships out west. (We acknowledge we're making several conclusory assertions here!)
There would be some losers, like the exchanges (perhaps, although arguable) and those overseas traders. But they can work from home these days, and keep trading after dinner, or set up their robots to take care of things!
We welcome any pros or cons to be added to our list: we're know we're missing many ideas.
