Is All-Day Trading Beneficial for U.S. Stocks?

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In recent days, the stock market has shown signs of warming up, prompting many to reassess their investment strategies, particularly with the ongoing fluctuations in the marketMany investors are considering regular contributions to their portfolios, focusing on quality bonds and diversified fundsAs part of this strategy, some individuals are exchanging a portion of their capital into artificial intelligence stocks, reflecting a broader trend towards innovative technological investments that promise high returns and potential growth.

The Chinese stock market, especially the A-share market, has experienced a recent uptick, yet there remains significant volatility without a clear leading trendThis environment of uncertainty signifies that stock investments carry inherent risks

However, prudent allocation towards stable, quality bonds has emerged as a reliable risk mitigation strategyWhile the yield on ordinary bond funds is not particularly enticing, certain mixed bond funds have registered impressive returns in recent monthsOne such mixed bond fund reported a remarkable return of 6.46% over the last quarter, outperforming many stock funds and presenting exceptional value for moneyWith zero lock-in periods and no transaction fees after seven days, this fund offers both stability and growth potential, prompting further investments from existing shareholders.

The realm of artificial intelligence represents a technological frontier that is poised to reshape global industriesWith its incipient development and vast potential still largely untapped, AI could very well become a central theme in both current and future market trends

Recently, AI-related sectors have entered an upward trajectory, establishing support at key levels, and demonstrating promising short- and long-term investment possibilitiesOne AI-focused fund, concentrated on leading stocks in this sector, boasts significant breakout potential, setting the stage for exceptional performance in the event of a bullish market rally.

Meanwhile, sectors such as liquor and renewable energy are displaying a symmetrical triangle pattern on the chartsAfter firmly holding critical support recently, there has been a bounce back, pushing prices towards the upper trend line of the triangleA breakout above this resistance could signify a solid trend reversalHowever, current market dynamics indicate ongoing fluctuations within this triangle, leaving the short-term market direction uncertain.

The innovative pharmaceutical sector recently breached the upper boundary of a triangular pattern, resulting in a price increase

Presently, it hovers near resistance levelsIf it manages to break through, there is potential for another spike towards previous highsHowever, without this necessary momentum, the sector has retraced back to mid-range levels, leaving investors in a holding pattern.

In the photovoltaic sector, following a previous setback at a pressure point characterized by recent highs, there has been a rebound amidst a downtrendCurrently, prices are oscillating around support levels, indicating recent stability but with unclear future movements ahead, as market participants weigh potential risks and rewards.

Equities remain in a state of oscillation, having recently faced resistance at their peak before experiencing a corrective downtrend

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They have since rebounded to crucial upward trend lines, providing a base for price stabilizationRecent days have seen moderate fluctuations, coupled with alternating phases of upward pushes followed by minor pullbacks, suggesting a cautious market stance.

The real estate sector has hit resistance at prior high pressure zones leading to a corrective phaseCurrently, it rests above key support levels, but recent attempts to regain momentum have failedAs the market remains positioned above these critical support areas, ongoing consolidation is expected.

In the semiconductor, military industrial, and telecom sectors, recent price oscillations have shown signs of resistance before pulling backCurrently, these sectors are also showing moments of upside movement following periods of downward correction

Although fluctuations have been minimal across recent trading sessions, it remains unclear how these sectors will trend moving forward.

The video game and robotics sectors have recently witnessed heightened activity, seeing prices bounce towards significant prior high pressure zonesA successful breach of these levels might set the stage for further upward movement, indicating robust market performanceCurrently, both sectors appear to be transitioning into an upward channel, but proximity to resistance may prove critical for near-term trajectories.

As discussions of extending trading hours intensify, the potential move towards 24-hour stock trading seems imminentBut whether this transition is beneficial remains a topic of debate.

The traditional rituals of ringing the opening and closing bells at venues such as the New York Stock Exchange or Nasdaq have deep historical significance, celebrated by participating companies and executives as an esteemed honor

However, as continuous trading becomes a norm on Wall Street and worldwide, the importance of these ceremonies could diminish.

At the end of last month, a major milestone was reached when the aptly named 24 Exchange became the first trading platform approved by the SEC to conduct overnight tradingAs reported by Axios, the firm is currently looking to raise $50 million ahead of a launch projected for next year.

Prior to this development, popular brokerages like Robinhood began offering 24-hour trading, allowing retail investors access to spaces usually reserved for hedge funds and institutional playersThis democratization of trading hours reflects a shift towards more equitable market participation.

In October, the New York Stock Exchange announced plans to file documents with the SEC, aiming for a 22-hour trading week that aligns with the increasing globalization and digitization of financial markets.

High-profile stocks like Tesla, Nvidia, and Apple often exhibit considerable price swings just before or after markets close, especially following earnings reports or major news events.

It is evident why many investors prefer not to limit themselves to the narrow trading window of 9:30 AM to 4 PM

After all, they can trade cryptocurrencies or forex markets around the clock, prompting a demand for extended trading hours in equities as wellHowever, trading outside regular hours introduces significant risk factors that stock investors must navigate with diligence.

The extension of trading hours in the U.Scomes with its own set of challenges, mirroring similar drawbacks present in current extended trading sessions offered by major exchangesInvestors can participate in these time slots through numerous retail brokerages.

The NYSE and NASDAQ offer pre-market trading from 4 AM to 9:30 AM, followed by after-hours trading from 4 PM until 8 PM for the NYSE, while NASDAQ wraps up its after-hours session by 6:30 PM.

In all these non-traditional trading periods, it is imperative for investors to understand that trading volume tends to be significantly lower

This low liquidity can translate into quicker and more volatile price movements when investors attempt to enter or exit their positions.

Richard Torrenzano, a former member of the NYSE's policy and operations committee, highlighted in a recent article for Fortune that while investors are generally not charged commissions, they are effectively paying commissions in the form of wider spreads.

These spreads, the differences between the buying and selling prices of stocks, tend to widen in after-hours trading, eroding overall profitabilityIn simpler terms, lower liquidity often leads to better returns during standard trading hours when the market is more active.

Why is the SEC a proponent of 24/7 trading?

The SEC, including its soon-to-be former chair Gary Gensler, unanimously approved 24 Exchange's proposal for continuous trading operations, signaling a favorable outlook on the premise that regulated overnight trading could enhance market transparency

Currently, institutions often seek large transaction counterparts outside of standard exchanges using alternative trading systems (ATS).

Hedge funds particularly favor so-called dark pools, which are primarily run by investment banks, allowing investors to make large stock trades away from public scrutiny.

In their statement regarding the approval of 24 Exchange, SEC commissioners Hester Peirce and Caroline Crenshaw pointed out that enabling overnight trading on publicly accessible markets would facilitate transactions for both U.Sand foreign investorsTheir statement highlighted that this could attract a broader audience to participate in America’s markets.

Nonetheless, in a commentary featured in Fortune, Torrenzano expressed skepticism regarding the likelihood of such a shift

He noted that prominent stocks like Apple, Microsoft, Amazon, Meta, Oracle, Visa, Mastercard, JPMorgan, and ExxonMobil already engage in trading beyond U.Smarket hours due to dual listings on exchanges in Tokyo, London, and other major markets.

He remarked, "Without a dominant position or established allure, drawing in non-U.Sinvestors to trade U.Sstocks during off-hours appears daunting, particularly when they can transact safely on domestic markets while their own markets are open."

However, for American retail investors, overnight trading may signal a pivotal transformationBeginning in the second half of 2025, 24 Exchange intends to operate from 4 AM to 7 PM on U.Sweekdays, with plans to expand to a 23-hour trading timeline, commencing from Sunday evening at 8 PM through to Friday evening at 7 PM.

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