My Case For 24 Hour Stock Exchanges

As a Trader, I find it truly offensive and appalling that I despite all the technological advances and globalization BS, I cannot trade stocks 24×7. I believe that markets would be more efficient if we had 24 Hour Stock Exchanges. I mean seriously. How many times have you been burned on a trade, just because you weren’t able to dump your position in the Pre-Market or After-Hours? Or, some bad news comes out on the stock that you’re holding @ 2 AM in the Morning, and you can’t do anything about it until the markets open. It’s frustrating, and to top it off, you’ve got exchange holidays. I understand the need to take a break once in a while, but I strongly believe that if stocks trade more like futures, with UP/DOWN Limits, and 24×7, the markets would be more fair and equal, for everyone.

Here’s my idea of an Ideal Stock Market:

  • 24×7 – 365 Days. With 15-30 Min breaks throughout the trading session.
  • 10% UP/DOWN Limit; this will prevent erratic moves and discourage Insider Trading, as people wont go for an easy 50-60-100% move UP/DOWN.
  • Controls on HFT. A minimum requirement to hold the positions for at least 1 minute.
  • Penalties for Quote Stuffing and Instant Order Cancellations.
  • Every single market participant MUST be required to get the proper Education and Certifications, before they are allowed to trade. The same should apply to Retail Investors.
  • Market Makers who don’t do their job and provide liquidity when most needed, should be penalized and banned forever.

My ideas might seem radical at first, but in a world where HFTs knock-off half of a company’s market cap in just a matter of seconds, I believe we need some stringent rules to preserve the integrity of the markets; whatever’s left of it.

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Wall Street Fool provides unbiased real-time market analysis and commentary for Stocks, Bonds, Futures, Forex, Fixed Income, and Derivatives markets.
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