| ▲ | clickety_clack 8 hours ago |
| 24/7 trading sounds like a nightmare. “Your retirement savings crashed 30% because there wasn’t enough liquidity to cover a 3am panic over non-news”. |
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| ▲ | jandrewrogers 8 hours ago | parent | next [-] |
| The beauty of it, though, is that it would recover almost immediately as systems arbitrage an obviously stupid situation. |
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| ▲ | plussed_reader 8 hours ago | parent | next [-] | | But on what time scale? Before a few connected entities make a profit or after? | | |
| ▲ | Dylan16807 7 hours ago | parent | next [-] | | The time scale is at least a thousand times faster than necessary for your retirement savings to be safe. The problem of investment companies selling stupidly at 3am solves itself as they either learn or go bankrupt. And the counterparties making money off those dumb moves don't need to be 'connected'. | |
| ▲ | terminalshort 5 hours ago | parent | prev | next [-] | | Makes no difference unless you are a daytrader | |
| ▲ | pembrook 4 hours ago | parent | prev | next [-] | | Milliseconds? Any overnight mispricing is going to become an arbitrage opportunity for market makers, hedge funds, and HFT firms...whom will then compete with each other to mine that arbitrage opportunity until profits go to zero, solving the market inefficiency and mispricing problem over time (and by over time, I mean like probably the first few nights and then it stops being an issue forever). In other words, a liquidity-based mispricing that happens consistently every night is going to quickly stop being mispriced since its so predictable. | | |
| ▲ | mtsr 4 hours ago | parent [-] | | Extracting value from the market as they do it and leaving everyone operating at normal time/capital scales with less. Or isn’t that what you meant? | | |
| ▲ | pembrook 4 hours ago | parent [-] | | Yes, when you correct a mispricing in markets that is a valuable service and you tend to get paid in proportion to the mispricing you correct (this is why markets work so well, they provide dynamic incentives in a decentralized way). In case you aren't aware, a world outside the US exists on different time zones and also invests in US capital markets. Having 24/7 trading a massive value-add for the entire world who also invests in US companies, which benefits US companies tremendously given they will continue sucking up the world's capital. This is yet another reason why global companies will continue going public in US markets instead of their own. Meanwhile Europe will continue struggling to form a capital markets union over the next 50 years while they slowly translate legal documents back and forth to each other in 42 languages, growing the fine dining economy of Brussels more than their domestic economies. |
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| ▲ | colechristensen 7 hours ago | parent | prev [-] | | If you're not trading overnight and there's a flash crash that corrects itself overnight... it's the people who are trading overnight taking money from each other. | | |
| ▲ | gizajob 4 hours ago | parent | next [-] | | It’s easy to forget that “overnight” trading is the middle of someone’s day, somewhere. Generally Asia. | |
| ▲ | bastawhiz 6 hours ago | parent | prev [-] | | Most Americans who invest money don't trade at all. They pay some guy at a bank to do it, and the guy at the bank is exactly the kind of guy who is trading at 3am. | | |
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| ▲ | koliber 3 hours ago | parent | prev | next [-] | | Most of the time things will work as they are supposed to and arbitrage will work as a damper. Every once in a while you'll get a self-reinforcing loop and then it will work as an a run-away amplifier. | |
| ▲ | svnt 6 hours ago | parent | prev | next [-] | | No, they stop hunt their way to depressed prices where they then buy anticipating the recovery while you closed out your “safe” retirement positions at -15%. | | |
| ▲ | thfuran 6 hours ago | parent [-] | | >while you closed out your “safe” retirement positions at -15% User error |
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| ▲ | dlenski 4 hours ago | parent | prev | next [-] | | I'm extremely skeptical about this. 24/7 trading will definitely burn a lot of extra energy in datacenters, make some speculators a little richer, and make a LOT of retail investors nervous… But what actual real-world problem will it solve? I for one am skeptical that more liquidity is always good. I think that having achieved $0.01 spreads, we're well-past the point of diminishing returns with high-frequency trading. | | |
| ▲ | elil17 4 hours ago | parent | next [-] | | Right? Why do we even need all-day trading? I have seen a once-daily auction proposed, which seems like a sensible approach to me. | | |
| ▲ | jedberg 3 hours ago | parent [-] | | That wouldn't be enough liquidity, and also wouldn't solve the problem if the auction happened at a specific time. Day traders would all put in their bid at the last possible moment. What solves the day trading problem is doing chunked actions at random small intervals (like between 2-7 seconds). Then you can't put your bid in at the last moment because you won't know when it is. So your best bet is to put in your bid when you've chosen a price, knowing that it will resolve within seven seconds or less. |
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| ▲ | pembrook 4 hours ago | parent | prev [-] | | > But what actual real-world problem will it solve? I know most Americans don't travel, but are you aware that timezones exist and there's an entire world outside the US that also invests in US companies? Why do you think global companies want to list in US capital markets instead of their own? Being the world's most desirable capital markets is a massive boon for the US economy and 24/7 trading will only accelerate this trend. |
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| ▲ | mmooss 7 hours ago | parent | prev [-] | | In the past, stupid situations on Wall Street have not resolved that way; they've resulted in disasters that cause economic harm to many people in the country and the world. Though sometimes people on Wall Street do make money from those situations. | | |
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| ▲ | yareally 6 hours ago | parent | prev | next [-] |
| We already have 23/6 trading with index futures. The S&P500 (ES), NASDAQ 100 (NQ), DOW (YM) will sometimes gap up or down on open just to match overnight trading. |
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| ▲ | gottorf 8 hours ago | parent | prev | next [-] |
| Honestly, stocks should trade for three hours a day. 24/7 trading sounds like a win for exchange operators and a loss for anyone else. |
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| ▲ | AngryData 4 hours ago | parent | next [-] | | And even that seems kind of generous to me. I see absolutely zero value in stock trading continuously for any length of time. Businesses don't make purchasing or investment decisions in that time span, nothing of significant value can even be created or sold or shipped in those time spans. | |
| ▲ | clickety_clack 8 hours ago | parent | prev | next [-] | | Maybe even just a single auction in the afternoon. | | |
| ▲ | gzread 6 hours ago | parent | next [-] | | I saw this as a serious proposal somewhere but I can't remember where. There are exchanges out there that run continuously but with delayed information feeds. | | |
| ▲ | bostik 4 hours ago | parent | next [-] | | The best known (at least in the tech circles - in good part thanks to HN and Matt Levine) is probably IEX. The exchange guarantees that every participant is behind the exact same time delay. And they do that by having a sufficiently long spool of optic fibre between the exchange "broadcast switch" and the market maker computers. Simple and effective. Relies only on laws of physics to create the delay. There are also exchanges that run with "frequent batch auction" principles.[0] 0: https://econpapers.repec.org/article/oupqjecon/v_3a130_3ay_3... | |
| ▲ | mlyle 5 hours ago | parent | prev | next [-] | | Run continuously, non-delayed, but only sweep the order book at a random time every [1,2) seconds. Run for something like our current extended market hours. Everyone gets the benefit of fast-enough execution and strong liquidity. Crazy high-frequency gamesmanship goes away. Smart quantitative plays are still possible. | |
| ▲ | clickety_clack 6 hours ago | parent | prev [-] | | It feels like something Matt Levine would have talked about. | | |
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| ▲ | logicallee 8 hours ago | parent | prev [-] | | one per week should do it. | | |
| ▲ | colechristensen 7 hours ago | parent | next [-] | | I'd settle for once per second. There's a lot of very fast trading nonsense which I've only heard defended with the "liquidity" bogeyman. A sealed-bid uniform-price batch auction seems like the right action. | | |
| ▲ | fc417fc802 6 hours ago | parent | next [-] | | Even once per second seems like overkill. That interval would still largely just facilitate the weaponization of exceedingly low information latency. 30 seconds seems reasonable, 1 minute better, and 5 minutes still better. In all honesty even going as long as 30 minutes should still facilitate all legitimate purposes. | |
| ▲ | jjmarr 6 hours ago | parent | prev [-] | | It's your God-given right as an American to get millisecond level price discovery. Trading delays sounds like Communist bureaucracy. |
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| ▲ | wholinator2 7 hours ago | parent | prev [-] | | Honestly what would happen if the stock market didn't exist. It seems like these days the price of stock is so disconnected from lived reality that genuinely confused if it would be all that catastrophic | | |
| ▲ | nightski 7 hours ago | parent | next [-] | | Well we’d go back to an era where private capital owns the world. The public would not be able to participate or benefit from the ownership of companies and share in the prosperity. | | |
| ▲ | AngryData 4 hours ago | parent | next [-] | | I mean the average person already barely has any participation at all, and certainly doesn't benefit from it when their money gets dumped down the toilet because of some widespread financial scams and grifts that repeatedly happen over and over again. | | |
| ▲ | refurb 3 hours ago | parent [-] | | 62% of adult Americans own stock. | | |
| ▲ | AngryData 3 hours ago | parent [-] | | And how many of those people are actively making decisions about what companies they are investing in instead of blindly putting money into a black box 401k account because they are financially punished for not doing so? |
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| ▲ | idiotsecant 7 hours ago | parent | prev | next [-] | | Yes, hard to imagine this crazy timeline where private capital rules the world. Totally inconceivable. | | | |
| ▲ | bmitc 5 hours ago | parent | prev [-] | | Private capital doesn't own the U.S.? | | |
| ▲ | michaelsshaw 4 hours ago | parent [-] | | BREAKING: Countries other than "U.S." found to be members of so-called "world" Although I'm not sure what he's on either. Capitalists definitely own and exploit pretty much the entire world, with few exceptions. |
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| ▲ | 7 hours ago | parent | prev | next [-] | | [deleted] | |
| ▲ | stogot 7 hours ago | parent | prev | next [-] | | I hypothesize all dividends, no share value. How would that world look | | |
| ▲ | fsckboy 7 hours ago | parent [-] | | that makes no sense. companies need capital, that's why there is a stock market. dividends are paid from past earnings, never capital (earnings are only a %age of the value of the capital) and not from higher expectations of the future. | | |
| ▲ | cluckindan 4 hours ago | parent [-] | | In a perfect world… reality is different, however. Plenty of companies take on debt to pay dividends, e.g. just before going public. |
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| ▲ | bluecalm 6 hours ago | parent | prev [-] | | It's not disconnected from reality. You just don't understand it. If the stock market didn't exist you would have less opportunities to invest in well priced companies and people would be manipulated in investing in opaque, often ridden with accounting shenanigans things like private equity. The more companies are public and subject to price discovery done by sophisticated players the better it is for uninformed players like normal investors but also less sophisticated informed players like pension funds. | | |
| ▲ | bmitc 5 hours ago | parent [-] | | > people would be manipulated in investing in opaque, often ridden with accounting shenanigans things This happens even with the stock market. See every financial crisis. | | |
| ▲ | bluecalm 3 hours ago | parent [-] | | Like which one?
2008 crisis was caused by reckless lending by banks as a result of silly regulation (government guaranteeing loans), implicit promise of bailouts and you could argue corruption.
What does it have to do with the stock market? It's a nice dismissing soundbite but you're just missing the broader point and real issues coming with people's money being invested in non public entities. Besides, just because some problems also happen with solution A doesn't mean they wouldn't be worse with solution B. You are not really making a point just dismissing the idea of a public market without understanding the value of it. |
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| ▲ | terminalshort 5 hours ago | parent | prev [-] | | If that were true then nobody would show up to trade during the extended hours and therefore absolutely nothing will change. |
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| ▲ | gzread 6 hours ago | parent | prev | next [-] |
| but you just don't sell and wait until the liquidity comes in and prices return to normal at 9am, no? |
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| ▲ | dragonwriter 6 hours ago | parent [-] | | Significantly large fluctuations, even if largely irrational themselves, can cause effects which have durable impacts on value. | | |
| ▲ | vasco 6 hours ago | parent [-] | | Give an example don't leave us hanging. I'm really curious how you can find an example of a temporary market liquidity move turning somehow into a long term adverse event for a company. Never heard of it |
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| ▲ | prodigycorp 6 hours ago | parent | prev [-] |
| There's already a huge futures market Liquidity will just migrate. |
