Won’t that be better for country’s economy and convenient for the people.
Like crypto markets are open all the time.
In: Economics
The stock market is not really set up to service “the people.” The vast majority of activity still continues to happen by, for, and through a smaller number of large trading houses, banks, investment groups and funds, etc. The people at these companies work office hours.
(Well, especially on their way up, they probably put in a lot of overtime, but in theory they work office hours.)
For such groups, if they really feel the need to trade 24 hours a day during the week, there is usually a market anyways. The stock market in the U.S. has trading windows open before and after the official markets actually open. The European markets start their day before our markets over here, and the Asian markets start their day in the evening New York time and run into the middle of the night New York time. So in that sense, except for on the weekends, most of the day, some market is open somewhere if you have large enough assets to be involved in them.
It comes from the time when stock markets were physical things were traders would meet up to do trades. It just wasnt pratical to have people meet up in the middle of the night.
Today it is still useful because companies and people dont have to worry that their entire stock can drop in the middle of the night or on weekend/holiday. They can mostly enjoy their time of when the markets close (ofcourse there are still things that need to be handled wenn the markets arent open so the stock doesnt drop at opening to zero but those are rather rare).
It evolved to be the way that it is. Used to be you needed a set group of people in the building to make the trades work.
You might think that these days it would be open 24/7 with computers now, but the reality is that as soon as there was a need for something like that the market just established something that is effectively the same thing. You can trade “futures” during non-business hours on a different exchange there are basically just proxies for what the market is doing when it’s closed. It’s basically betting on the price at the opening of business the next day — so pretty much the same thing in many respects as just buying and selling the actual thing.
While stock trading might appear to be fully automated, it really isn’t. There are large numbers of “market makers,” living, breathing human beings who are like middlemen making razor-thin profits on most of their trades. These people provide a *lot* of the necessary liquidity for markets to operate efficiently.
Since these are real people, they like to put in their hours and then go home, maybe eat BBQ on Saturday evening.
There are “after hours” trading sessions before and after the usual 9:30 am – 4:00 pm trading hours, and they are noticeably less price efficient (since the market makers aren’t working).
Could stock markets eventually be made fully automated? Possibly, but the existing system has been in place for a long time, and it works just fine.
As with many of these things, it’s more about the people than the technology; and to some extent about tradition
The people managing the market and everyone serious about trading on it have to be “on duty” whenever the market is open. If the market is open 6-7 hours a day, closed on weekends and public holidays and possibly for a lunch break, that fits nicely into a 9-5 job.
If market was open 24/7, all these people would have to work shifts; lot of extra hassle and expense, and for what? The extra hours wouldn’t really benefit anyone, it’s not like the economy is doing much at night anyway. It’s not like a power station or a hospital.
Everyone is already used to it, anyway; if they have a trade to make, they put it in when the market is open.
24/7 would also be worse for individuals and small firms; with the traditional “trading hours” market, an individual or a small team can fully take part, “on duty” from opening to closing. With 24/7, only organisations that can field multiple teams (to cover all the hours) could really participate fully.
Markets are made up of people, the more the better. Markets with few participants are more volatile with less liquidity (money) and amplifying bad information.
Trading off hours is possible with stocks but it’s rarely a good idea and almost no one does it.
To add to the other answers, while stock markets are mostly automated nowadays, there still is human intervention at times. As with any machine, you need humans to make sure it runs as smoothly as possible and to resolve any issues that arise when it doesn‘t.
Latest Answers